Large holders regain trust in Bitcoin
According to data from Santiment, wallets holding between 10 and 10,000 Bitcoins currently account for approximately 68.17% of the total circulating Bitcoin supply, up from 68.07% last week. Analysts believe that the repurchasing behavior of these so-called "whales" is a positive signal, indicating a restored confidence in the stability and upside potential of this asset. This accumulation trend is seen as a significant factor in boosting overall market confidence.
After several weeks of significant volatility, Bitcoin's price has stabilized around $71,350, with the latest CoinMarketCap data showing an increase of about 6% over the past seven days. Market observers believe this newfound stability has encouraged large holders to re-enter the market.
Examining the behavior of small investors
Santiment notes that a decline in small holder participation, coinciding with periods of continued accumulation by whales, is often viewed as an indicator of a long-term market bottom.
However, Santiment warns that overall market sentiment remains clouded by uncertainty. The firm emphasizes that as long as retail investors remain optimistic, establishing a clear price bottom will still be challenging. Notably, historical lows for Bitcoin often occur when small investors begin to sell off in large quantities, further suggesting a potential reversal.
The Cryptocurrency Fear and Greed Index, a broad reference for investor sentiment, remained in the "Extreme Fear" zone as of Sunday, with an index value of 16. This indicates that despite Bitcoin's recent price rebound, traders are still exercising caution.
During the severe sell-off in early March, large Bitcoin holders sold approximately 66% of their Bitcoins, which were acquired between February 23 and March 3. This sell-off temporarily pushed prices above $74,000, but they subsequently fell back below $70,000.
Cautious optimism dominates Bitcoin's long-term outlook
On-chain analyst Willy Woo has moderated the overall market's optimistic sentiment, suggesting that despite signs of renewed activity, Bitcoin may still be in a prolonged bear market from a liquidity cycle perspective. Woo points out that while fund inflows have improved since mid-February, he warns that the broader risk environment remains uncertain. However, the decline in the Volatility Index (VIX) may enhance risk appetite in the short term.
Bitcoin's price has stabilized near $70,000, partly due to easing geopolitical risks related to Iran. The recent rebound followed a sharp decline in the range of $63,000 to $66,000, triggered by soaring energy prices and macroeconomic uncertainty. Easing concerns over energy prices and geopolitical tensions have propelled a rebound in stocks, including the S&P 500, with Bitcoin also rising by 4% daily.
Institutional demand for Bitcoin is also on the rise. The U.S.-listed spot Bitcoin exchange-traded fund (ETF)...