Bitcoin owners are getting active

The recent drop in Bitcoin's value near $50,000 on August 5 and 6 caused widespread anxiety in the market. However, while many investors panicked, seasoned market players recognized this as an opportunity. On-chain data indicates that Bitcoin whale transactions surged to their highest levels since early April during this time.

According to Santiment, Bitcoin recorded 5,738 transactions worth over $1 million and 28,319 transactions worth over $100,000 during this downtrend.

People are Buying more Bitcoin

The trend of accumulating Bitcoin has extended beyond just a few days. Over the past month, long-term Bitcoin holders have increased their holdings by 404,000 BTC, worth over $23 billion. This accumulation includes 40,000 BTC acquired through spot Bitcoin ETFs. However, this ETF accumulation did not occur during the recent dip, as these funds saw a net outflow of $554 million between August 2 and 6.

CryptoQuant CEO Ki Young Ju interprets these figures as strong evidence of significant accumulation during the prolonged correction period. Additionally, there has been no major selling pressure from older Bitcoin whales—those who have held BTC for over three years—as they sold their holdings to new whales between March and June.

Meanwhile, data from CryptoQuant indicates that Bitcoin supply on centralized exchanges is at a multi-year low. Whales holding over 1,000 BTC have been withdrawing their assets from exchanges at the highest rate since 2015. This shift towards self-custody suggests a low intention to sell, indicating that more long-term investors are committed to holding the largest cryptocurrency.

What’s Next?

Since the recent downturn, Bitcoin has stabilized within the $55,000 to $60,000 range. Its market capitalization has also recovered, rising from $951 billion on August 5 to $1.12 trillion today. U.S. spot ETFs ended a three-day outflow streak with an inflow of $45.14 million on August 7.

Despite this recovery, BitMEX co-founder Arthur Hayes predicts another downturn in the cryptocurrency market in the coming days. Additionally, the recent Ethereum sell-off by Jump Trading could lead to increased selling pressure.