What is the reason for the stagnation in bitcoin's price increase?
Spot bitcoin accumulation is still ongoing; otherwise, the price of bitcoin would likely be much lower than its current level.
Spot bitcoin accumulation is still ongoing; otherwise, the price of bitcoin would likely be much lower than its current level.
Written by: Matt Crosb
Translated by: AididiaoJP, Foresight News
Despite continuous institutional accumulation, bitcoin’s price performance remains lackluster, with supply and demand dynamics indicating that long-term holders are taking profits.
In recent weeks, bitcoin’s price has left many investors puzzled. Despite heavy accumulation by institutions and treasury companies, bitcoin’s price has remained flat. Is this institutional accumulation a myth, or are we simply witnessing a tug-of-war between supply and demand?
We have delved into on-chain data, treasury holdings, and derivatives activity to distinguish fact from conspiracy theory and to explain the real factors driving bitcoin’s price.
The Paradox of Institutional Accumulation and Stagnant Bitcoin Price
Over the past few months, ETFs and treasury companies are estimated to have accumulated a total of 200,000 BTC. Overall, total treasury holdings are now close to 1 million bitcoin. However, despite these inflows, bitcoin’s price, after briefly touching a historic high above $120,000, fell back to $108,000 and has since been consolidating sideways.
Why hasn’t this institutional demand been reflected in bitcoin’s price? The answer lies in profit-taking by long-term holders. Since July, more than 450,000 BTC have moved from long-term wallets to new short-term market participants. This distribution has effectively offset the bullish impact of institutional inflows on bitcoin’s price.
Long-Term Holders Are Taking Profits
On-chain data clearly shows that those who have held bitcoin for four to ten years are selling. These investors accumulated bitcoin at prices far below current levels, and now, with bitcoin reaching new all-time highs, they are realizing profits.
This pattern is not new. Historically, long-term holders reduce their positions when retail and institutional investors drive up bitcoin’s price, and then reaccumulate after the market cools down. Current data indicates that this group’s selling pressure is accelerating, intensifying bitcoin’s sideways price action.
The Impact of Derivatives Factors
Another factor dragging on bitcoin’s price performance is the increase in futures and options activity. Since July, open interest in derivatives across exchanges has increased by about 50,000 BTC. While this does not directly prove the existence of “leveraged bitcoin,” it does mean that funds are flowing into leveraged bets rather than spot accumulation, thereby limiting upward pressure on bitcoin’s price.
The CME futures and options market has also expanded significantly, amplifying the impact of derivatives on short-term bitcoin price movements. The net effect is that more liquidity is locked in contracts, reducing direct buying pressure on BTC itself.
The Role of Supply and Demand Dynamics
So, is bitcoin’s price being manipulated by leveraged bitcoin? The evidence does not strongly support this conclusion. What we are witnessing is real-time supply and demand economics at work:
- Institutions have accumulated 200,000 BTC.
- Long-term holders have distributed 450,000 BTC.
- Over 50,000 BTC are locked in the derivatives market.
In summary, this explains why, despite institutional demand making headlines, bitcoin’s price remains stagnant.
What’s Next for Bitcoin’s Price?
Although the current situation suggests that sideways consolidation may continue in the short term, this does not appear to be a market top. If funding rates turn negative, a short squeeze could drive bitcoin’s price higher again. However, for now, the imbalance between accumulation and distribution suggests that sideways movement may persist.
Looking at the bigger picture, bitcoin’s bull market remains intact. Investors concerned about “leveraged bitcoin” should remember: spot accumulation is still ongoing, and without it, bitcoin’s price would likely be much lower than its current level.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Bitwise brings NEAR to Wall Street – But the chart isn’t impressed
Synopsys and OpenAI reach AI chip design partnership, stock price surges over 7%
Synopsys has signed a multi-year legally binding agreement with OpenAI to jointly develop GPT-Synopsys, a model specifically trained and fine-tuned for chip design tasks. OpenAI will pay Synopsys a subscription fee for tool licensing, and both parties will share revenue based on improvements in chip design achieved by customers using the product.
How does Wall Street view the PCE? Goldman Sachs delays expectation for Fed rate hike
After the lower-than-expected US August PCE data was released, Goldman Sachs delayed its expectation for the Federal Reserve's second rate hike from October to December, and stated that it does not rule out the possibility that the Fed may eventually decide no further hikes are necessary. "New Fed Newsletter" Timiraos noted that the PCE does not change the previously known trend of rising inflation. Currently, the market prices in a 39% probability of a rate hike in October, down from 45% before the PCE release; and a 90% probability in December. The yield on 2-year US Treasury notes dipped slightly after the PCE announcement and then rebounded, while the 10-year yield continued to rise.
Zeta Global stock jumps 9.43% intraday, flashes overbought signals
Crypto prices
More
