Key Points
- Bitcoin whales accumulated 84,000 bitcoins, worth $5 billion in July, indicating a possible major market shift.
- Bitcoin’s on-chain cyclical indicators, futures and spot trading volumes, and ETF inflows suggest the continuation of a bull market.
In July, large holders of Bitcoin (BTC) added 84,000 bitcoins to their holdings, representing a total value of $5 billion. This notable accumulation marks the most significant monthly increase since 2014 and often signals a major market shift.
This significant activity implies that Bitcoin might be on the brink of a substantial move. Historically, significant accumulation by large holders has often been a precursor to major market shifts, making it a critical time for investors to remain vigilant.
Signs of a Bull Market
Moreover, most Bitcoin indicators, including the bull-bear market cycle indicator that was close to signaling a downturn, have now returned to indicating a bull market. Bitcoin’s price was briefly discounted for just three days, suggesting a robust bull market. The market is expected to rebound within two weeks.
When Bitcoin’s price dropped to $50K, futures trading volume rose to a record $154 billion, and spot trading volume reached $83 billion, the second-highest ever. This dramatic drop was followed by a strong recovery, with Bitcoin’s price increasing by over 23% from its weekly low.
ETF Inflows Increase
Despite Bitcoin’s price fluctuations, BlackRock’s Bitcoin ETF has only experienced one day of outflows since its January launch, with over $20 billion locked. Recently, BTC ETFs saw $194 million in inflows after five days of outflows. Notably, every time BTC drops near $50K, ETF inflows surge significantly.
This pattern has repeated, with large inflows occurring each time BTC dips to the lower $50,000s. This trend suggests that major investors are buying the dip.
Bitcoin has also shown an interesting pattern around the 5th of the month. In both July and August, it dropped sharply for five days at the start of the month but then experienced significant rallies. While this might be a coincidence, it’s notable that BTC has likely absorbed sell-side liquidity, which could signal a potential rally. Analysts generally view the $70K peak as a short-term high.
