Bitcoin’s Cooling Momentum
In recent weeks, Bitcoin’s momentum has noticeably slowed. Many investors are opting to lock in profits, and this decrease in demand has contributed to the cooling trend. Current activity is roughly two-thirds lower than what we saw last month.
A weekly report from Cryptoquant notes that the Bitcoin market has transitioned from a highly bullish phase to a more tempered one.
Demand Dips
During this period of cooldown, Bitcoin demand has dropped significantly, from 174,000 BTC at its July peak to just 59,000 BTC. Institutional buyers are still purchasing Bitcoin, but at a notably reduced rate. One prominent business intelligence firm, previously buying up to 171,000 BTC, has seen their monthly accumulation taper to around 27,000 BTC by November 2024.
Moreover, Spot Bitcoin Exchange-Traded Funds (ETFs) are experiencing their lowest inflows in four months, with 30-day net purchases hovering near 11,000 BTC—levels not witnessed since late April.
“This broad decline in demand growth signals a decrease in momentum, which likely played a role in recent price corrections. Ongoing weak demand could keep Bitcoin in this cooling phase,” stated Cryptoquant.
In addition, on-chain indicators are indicating weaker market signals. While the market remains structurally sound, the momentum appears to be faltering. The Cryptoquant Bull Score Index has shifted from “Extra Bullish” to “Bullish Cooldown” after Bitcoin surpassed $120,000. This aligns with a trend of declining prices.
“When the market moves into a bullish cooldown phase, it often precedes sideways trading or slight corrections. Higher momentum could remain constrained in the near term unless strong demand re-emerges,” the analytics firm added.
Whale Investors Profit
On another note, new whale investors have been profiting substantially. Since July 4th, they have collectively earned around $74 billion, with the biggest daily profit recorded at $9 billion this year.
As of August 16th, these new investors were reported to have gained up to $2 billion.
Currently, Bitcoin’s price is approximately $116,000, which reduces downside risk. Analysts at Cryptoquant suggest that crucial digital assets might find support near the $110,000 mark, a level that often offers stability during bullish cycles and prevents further sales.
