Large Bitcoin [BTC] holders have been reducing their exposure over the past year. BTC whale holdings of a particular cohort have decreased by roughly 220,000 Bitcoin over the past year – A sustained and measured withdrawal from the market.
This could be a reallocation and not a distribution phase. A recent AMBCrypto report analyzed the Value Days Destroyed metric to highlight this point. On the other hand, the network’s hashrate growth has stalled as a result of Bitcoin trading below the miners’ breakeven cost of $95k-$96k.
Promise of all-time low realized volatility
The whales have been trimming exposure lately and the growing pressure on miners showed that Bitcoin was under stress, but not yet in a capitulation phase. That’s not all though as Fidelity noted that the 1-year realized volatility had fallen to an all-time low of 42%.
When Bitcoin volatility bottoms out, as it did in 2016 and 2023, it tends to be followed by the price setting a new all-time high. The argument for the fading 4-year cycle hinged on market maturation and institutional investors stepping in to prevent extreme market drawdowns, such as 80% during bear markets.
That being said, investors should be cautious. Low volatility can be followed by months of consolidation and sideways price action before the next move higher. If it comes.
Cost-basis comparison shows new whales could be threat to bulls
On CryptoQuant Insights, user Arab Chain used the realized price of different cohorts of users to demonstrate that long-term whales and Bitcoin miners were still in profit. LTH whales’ realized price was $39.6k per Bitcoin, and miner whales’ realized price was $58.6k.
At the time of writing, the price was comfortably above these levels and supported the overall long-term stability of the market.
That was not enough to rule out short-term volatility and a deeper market correction though. In a post on X, crypto analyst Axel Adler Jr clearly outlined his long-term expectations for Bitcoin.
New whales, whose holdings are aged less than 155 days, had a realized price of around $99k. These whales would look unfavorably upon “locking up money for two years.” Instead, they would use a price bounce to $99k to exit at breakeven.
Final Thoughts
- All-time low in realized volatility tends to be followed by new all-time highs in price, which could take months to play out, if it does.
- New whales could dictate whether Bitcoin manages to regain the $99k supply zone.
