Amid the recent decline in retail demand for Bitcoin, large investors are accumulating the cryptocurrency, which may indicate market recovery. This analysis explores how sentiment and demand for Bitcoin are shifting.
Accumulation of Bitcoin by Large Investors
In the past week, large investors, also known as 'whales', accumulated over 16,000 BTC while retail demand turned negative at -5.7%. This behavior mirrors early August dynamics, where larger players bought Bitcoin on price dips while smaller investors sold their assets.
Price Recovery After All-Time High
Last week, Bitcoin reached a new all-time high above $120,000, recording a price of $123,640. However, following this peak, growth stalled, and the price declined to approximately $116,825. The Bitfinex Alpha report indicated that the lack of macroeconomic catalysts led to a sharp price pullback.
Liquidity Pressure and Leverage Impact
Bitcoin's consolidation coincided with signals that the US M2 money supply might peak in September, traditionally creating headwinds for risk assets. It is estimated that the Treasury's refill process could withdraw $500 to $600 billion from the market, leading to tightened liquidity in the crypto sector. Amid heightened volatility in the futures markets, futures positions for Bitcoin remain high, indicating active capital reallocation.
The situation in the crypto market remains tense, with signs of price recovery for Bitcoin despite negative retail demand. Current conditions exhibit dynamics that require market participants' attention.
