On-chain data shows strong-hand accumulation mirrors past cycle bottoms, signaling confidence returning beneath widespread pessimism.
While many retail investors panicked and rushed to exit the market, whales and institutions instead chose to dive deeper.
Amid the gloomy macro environment and sluggish market sentiment, a quiet movement began to take place behind the scenes. Those with deep pockets appear to be avoiding the panic, instead slowly but surely accumulating Bitcoin.
According to analysts at XWIN Research Japan on CryptoQuant, the market is currently entering a silent accumulation phase. Retail sentiment is trending negatively, especially after the wave of layoffs in the United States surged to 153,000 last October, the highest figure since 2003.
Furthermore, the consumer sentiment index also plummeted to 50.3, nearing its lowest point. But instead of withdrawing, long-term holders and institutions are increasing their exposure to Bitcoin.
One striking example is JPMorgan now holds more than 5.28 million shares of BlackRock’s Bitcoin ETF, equivalent to a value of approximately $340 million. That’s a 64% increase since June.
Whales are also moving aggressively. In the past week alone, more than 30,000 BTC have been accumulated, worth nearly $3 billion.
Meanwhile, as of press time, BTC is trading at about $102,223, up 1% in the last 24 hours, with $8.68 billion in daily trading volume. So, who’s really panicking?
On the other hand, on-chain data shows a shift in ownership from weak to strong hands. UTXO Age Bands show that coins held for more than three years now dominate the realized value, while short-term holdings have declined dramatically. This pattern occurred at the bottom of the 2019 and 2020 cycles.
CNF previously reported that JPMorgan actually views the recent Bitcoin price drop as a buying opportunity. According to them, the leverage reset actually opens up room for a healthier rally in the future.
Furthermore, the “digital gold” narrative for Bitcoin has regained strength, given that the asset is now trading at a discount compared to physical gold.
Another signal comes from the movement of stablecoins. We previously highlighted that stablecoin inflows to Binance have increased again. This indicates new liquidity is ready to enter the market, and this is usually associated with accumulation by large players.
The correlation between liquidity and Bitcoin activity is quite strong, and this could be a sign that the market is entering a healthy consolidation phase before the next expansion.
Furthermore, the President of the New York Fed, John Williams, hinted at the potential for another balance sheet expansion. If monetary easing is indeed rolled out again, Bitcoin could be one of the assets to respond first.
As an additional consideration, popular analyst Ali Martinez identified three important support levels based on Pricing Bands that are worth watching: $98,340, $75,475, and $55,980. These levels have the potential to become strong resistance zones if the price experiences a further correction.
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