Bitcoin’s Current Status: Support from Big Holders, But Uncertain Demand

(Bloomberg) — Bitcoin has recently seen new backing from some of its biggest holders, yet the increase in demand appears limited, leading to questions about whether this indicates a real recovery or merely attempts at damage control.

In the past week, a significant wallet, often referred to as a whale wallet, has gathered around 53,000 coins—marking its largest buying activity since November, following a period of heavy selling. Such purchases have contributed to stabilizing prices after a sudden selloff, though most investors seem to be holding back.

According to data from industry research firm Glassnode, wallets containing over 1,000 Bitcoins accumulated tokens valued at more than $4 billion during this timeframe, interrupting a months-long trend of selling that had pushed Bitcoin down nearly 40% from its peak in October.

“That will slow down the economic downturn,” noted Brett Singer, head of sales at Glassnode. “However, we need to see more money entering the market.”

This cautionary note is crucial. While large holders are stepping back, broader market movements remain concerning. Excluding ETFs and exchanges, major firms with Bitcoin holdings have sold a net total of over 170,000 coins (approx. $11 billion) since mid-December, as reported by Glassnode.

Bitcoin’s price movements reflect the inconsistent support it has received. After hitting an all-time high in October, the cryptocurrency dipped to around $60,000 last week but has since risen to about $70,000. As of 9 a.m. Wednesday, it was trading above $69,100 in the Singapore market.

This erratic behavior from large holders raises a common question about the market: Who will drive the next prolonged rally?

Many investors who acquired Bitcoin through recently launched exchange-traded funds are now facing losses and may hesitate to make aggressive additional purchases. Concurrently, publicly traded companies that previously accepted Bitcoin as a reserve asset have slowed down their acquisitions due to declining stock prices.

Without fresh sources of demand, the recent accumulation of Bitcoin appears more like a strategy for damage control rather than a sign of renewed confidence. While this kind of activity has occasionally helped stabilize short-term decreases in prior cycles, it seldom leads to sustained upward momentum on its own.

“I sold some by the end of last year, and I’ll likely buy again once the storm passes,” shared Bruno Barr, a long-time crypto investor. “But right now, we’re still in the middle of a storm.”