CryptoQuant cites declining growth of bitcoin whale holdings as bearish indicator
Quick Take
- The growth in the total holdings of large bitcoin investors has slowed, from a monthly pace of 6% in March to just 1% currently, according to a CryptoQuant report.
- The decline is cited as a bearish indicator as a monthly growth rate of more than 3% in whale holdings has been associated with increasing bitcoin prices, the report added.
The declining monthly growth rate of bitcoin whale holdings is a bearish indicator for the digital asset's price, according to onchain data provider CryptoQuant.
CryptoQuant's Weekly report shows the 30-day percentage change in whale holdings has decreased from 6% in February to a current growth rate of just 1%.
The report said the decreased appetite of large scale bitcoin holders was a bearish market indicator. "Historically, a monthly growth rate of more than 3% in whale holdings has been associated with increasing bitcoin prices, which is not the case at the moment," CryptoQuant analysts said.
The monthly growth rate of total whale holdings has decreased from 6% in February to a current reading of 1%. Image: CryptoQuant.
Overall bitcoin demand dips into negative territory
The report focuses on one of CryptoQuant's metrics called apparent demand. It's the difference between the daily total bitcoin block subsidy and the daily change in the number of bitcoin that have not moved in one year or more.
"Overall bitcoin apparent demand has slowed considerably since early April when the digital asset was trading at $70,000. Demand has declined from a 30-day growth of 496,000 bitcoin, the highest since January 2021, to a current negative growth of 25,000 currently," the report said.
CryptoQuant analysts pointed to data showing that as demand slowed, bitcoin prices declined from around $70,000 in early June to a low of $49,000 on August 5. "We would need to see apparent demand expanding again for prices to recover," the analysts added.
The CryptoQuant report added that the decline in demand is also evident in a lower price premium for bitcoin on Coinbase.
"Early in 2024, the price premium for bitcoin trading on Coinbase reached 0.25%, coinciding with strong demand for bitcoin, as shown in previous charts, and larger purchases from exchange-traded funds. However, the premium has been trending downward since then, currently standing at 0.01%, indicating that bitcoin demand in the U.S. has been weakening," the CryptoQuant analysts said.
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