Key Points
- Bitcoin’s network activity and whale accumulation have decreased, raising questions about its breakout potential.
- Increased profit-taking and high profitability among Bitcoin holders may intensify potential downward pressure.
Bitcoin’s network activity has seen a notable decline since December 2024, with a decrease in both transaction volume and active addresses. The Coinbase Premium Gap is currently at -5.07, hinting at continued selling pressure from traders based in the United States.
Despite Bitcoin’s strong price performance in recent weeks, these metrics indicate a weakened on-chain demand. As of now, Bitcoin trades at $94,446.17, having experienced a 0.28% decline in the past 24 hours.
Concerns Over BTC Outflows
There has been a significant drop in large holder netflows, with a 90-day drop of -99.86%. This decline suggests a pause in whale accumulation, even though Bitcoin’s momentum remains above $94K.
While exchange outflows continue, the absence of large entity buying raises questions about the strength of institutional conviction. Historically, whale accumulation has often been a precursor to significant price rallies.
Profit-Rich Holders and Selling Pressure
On-chain data reveals that 82.09% of Bitcoin addresses are currently “in the money,” meaning the majority of holders have unrealized profits. In such situations, the inclination to accumulate more may decrease, particularly in uncertain market conditions.
If Bitcoin faces downward pressure, these profit-rich holders could rush to secure their profits, potentially intensifying the decline. High profitability often limits immediate upside unless there is an influx of new capital.
Resistance and Technical Signals
Bitcoin has had difficulty surpassing the $97,914 resistance level. Parabolic SAR dots continue to float above the candles, indicating active bearish pressure. Meanwhile, the MACD appears to be flattening, suggesting weakening momentum and a possible crossover.
This technical setup suggests indecision. Without renewed buyer strength, Bitcoin may struggle to maintain its current levels. The price compression near resistance often precedes breakout or breakdown, and current signals lean slightly bearish.
Despite on-chain outflows and Bitcoin’s proximity to key resistance, weak whale activity, high profitability, and increased profit-taking pose downside risks.
Bitcoin’s potential to climb higher heavily depends on an influx of fresh inflows and renewed conviction from large holders. Without these factors, Bitcoin may struggle to break above $98K and could potentially revisit lower support zones.
