The decreasing growth rate of bitcoin whale holdings is being viewed as a bearish signal for the cryptocurrency’s price, according to a recent report from on-chain data provider CryptoQuant.
In its weekly report, CryptoQuant noted that the 30-day percentage change in bitcoin whale holdings has dropped significantly, from 6% in February to just 1% currently. The report suggests that this reduced accumulation by large-scale holders often seen as a key factor in driving bitcoin’s price—is a sign of bearish market conditions.
“Historically, a monthly growth rate of over 3% in whale holdings has correlated with rising bitcoin prices, which we are not seeing at this moment,” CryptoQuant analysts stated. The declining interest from whales could mean that the digital asset’s bullish momentum is fading.
Overall Bitcoin Demand Turns Negative
The report also highlighted a broader decline in bitcoin demand, as measured by CryptoQuant’s “apparent demand” metric. This metric tracks the difference between the daily bitcoin block subsidy and the daily change in the amount of bitcoin that has not moved in over a year.
“Apparent demand for bitcoin has slowed considerably since April when bitcoin was trading at $70,000. The 30-day growth in demand, which peaked at 496,000 BTC in January 2024, has now turned negative, showing a decline of 25,000 BTC,” the report noted.
This drop in demand aligns with bitcoin’s price decline from approximately $70,000 in early June to as low as $49,000 by August 5. Analysts from CryptoQuant suggested that a recovery in demand would be necessary for bitcoin prices to rebound.
Falling Price Premium on Coinbase Adds to Bearish Sentiment
Another key finding in the report is the declining price premium for bitcoin on Coinbase, a popular U.S.-based exchange. At the start of 2024, this premium reached 0.25%, reflecting strong demand fueled by exchange-traded fund (ETF) purchases and investor interest. However, the premium has steadily fallen to just 0.01%, signaling weakening demand for bitcoin in the U.S. market.
As whale holdings and overall demand for bitcoin dwindle, CryptoQuant analysts suggest that these trends could continue to exert downward pressure on bitcoin prices unless there’s a significant shift in market dynamics.
