Two-way price volatility saw Bitcoin whales accumulate $5.4 Billion of BTC in July, capitalizing on market lows in the fastest scoop-up in a decade.
Large Bitcoin holders, or addresses owning at least 0.1% of BTC’s circulating supply, accumulated over 84,000 BTC in July, valued at $5.385 Billion, per IntoTheBlock and Trading View Data.
The move represented the highest since October 2014, when Bitcoin reached 11-month lows.
Similarly, last month’s accumulation was driven by bargain-hunting during the early July price dip below $55,000 and brief pauses during the recovery to $69,000.
This strategic accumulation displays confidence and a strong belief that the prolonged consolidation phase between $50,000 and $70,000 will eventually end with a bullish breakout.
Why Are Bitcoin Whales So Confident?
This accumulation precedes the anticipation of an upcoming US Federal Reserve interest rate cut. According to CME’s FedWatch tool, traders estimate the probability of a September 5.25 – 5.00% ease at 86.5%, from its current 5.25% – 5.50%.
This follows Federal Reserve Chair Jerome Powell’s comments on Wednesday, which indicated a potential rate cut coming as soon as September.
Volatility Alert #FOMC meeting today at 11:30 PM IST
Everyone is waiting for the Fed’s decision and hints about future rate cuts.
But it is expected that there will be no rate cuts. Current rate is 5.5%. pic.twitter.com/HrHk7FWWkk
— Rananjay Singh (@TodayCryptoRj) July 31, 2024
Powell emphasized that the economic data needs to back up the potential renewed liquidity easing. The central bank held its benchmark interest rate steady in the 5.25%-5.50% range, maintaining a status quo as expected.
The Fed and Powell’s remarks suggested that a September rate cut isn’t a done deal yet. Rather, “it’s just a question of seeing more good data” from inflation and labor market softening to point in that direction.
The bullish sentiment also stems from renewed capital inflows via stablecoins or digital assets with values pegged to external references like the U.S. dollar.
As per IntoTheBlock data, the total market capitalization of stablecoins rose 2.11% to $164 billion in July, the highest since April 2022.
This accumulation suggests inflows of new capital into the markets, reflected by the positive price action of digital assets in July.
The Market Is Over Mt. Gox
The recent price volatility has been largely fueled by the past German Bitcoin selloffs and ongoing defunct Japanese exchange Mt. Gox Bitcoin transfers to repay creditors.
However, Bitcoin’s price has remained stable despite Mt. Gox transferring a further $2.5 billion worth of Bitcoin on Wednesday.
This transfer reduced Mt. Gox’s Bitcoin holdings from $9 billion to $3 billion. Historically, such large transfers often precede price drops. However, it appears traders might not be as worried about potential sell-offs as they have been in recent weeks.
Analysts from Arkham Intelligence reported that 33,105 BTC were moved, likely to BitGo for distribution to creditors.
While some selling pressure is anticipated due to Bitcoin’s long-term price increase, most creditors are expected to be long-term holders. In a report, blockchain analytics firm Glassdoor noted:
“The profile of the creditors appears to represent one of a HODLer or long-term investor… dampening the magnitude of sell-side pressure across the coming weeks.”
This tendency to hold rather than sell helps maintain market stability and supports Bitcoin’s price
Overall, Bitcoin’s stability amidst such significant movements suggests a strong market and enduring confidence in its value.
This sets an interesting precedent for price action in the coming months, highlighting high-potential investment opportunities.
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