Big Bitcoin investors, known as "whales," have slowed their buying, causing concern about whether Bitcoin can reach new highs. According to recent data from CryptoQuant, these whales are increasing their Bitcoin holdings by just 1% per month, compared to 6% in February, which was the fastest pace since 2019.
In the past, when whales were buying more than 3% extra Bitcoin each month, prices tended to go up. But now, with their buying rate dropping, Bitcoin isn’t seeing the same price growth.
Another problem is that U.S. spot Bitcoin exchange-traded funds (ETFs) aren't performing well. Last week, these ETFs only brought in an average of 1,300 BTC per day, which is much lower than in March. CryptoQuant says that for Bitcoin prices to rise again, there needs to be a big increase in buying through these ETFs.
On the bright side, "permanent holders," who buy Bitcoin and never sell, are still increasing their holdings at a record pace. These investors are adding Bitcoin faster than they did earlier this year when the price of Bitcoin went over $70,000.
Meanwhile, those who bought Bitcoin more recently are seeing losses after prices dropped to a six-month low in early August. Their average purchase price is around $63,000, while Bitcoin was trading at about $59,000 on August 20.
With whale buying slowing down and ETF demand weak, it’s uncertain if Bitcoin can reach new highs soon. The market will need stronger demand from both whales and ETFs to push prices up again.
