In a twist that could signal the next phase of the bitcoin bull market, data shows that large bitcoin holders known as “whales” have resumed accumulating after a period of profit-taking. This bullish behavior comes on the heels of Donald Trump’s inauguration as U.S. president, an event that many believe could accelerate the flow of institutional capital into bitcoin due to his administration’s perceived pro-crypto stance.
Whales Scoop Up 2% of BTC Supply in January
According to data from on-chain analytics firm CryptoQuant, the monthly growth rate of bitcoin holdings among large investors has rebounded sharply from -0.25% on January 14 to +2% on January 17, marking the highest monthly accumulation rate since mid-December. This metric tracks changes in the bitcoin balances of wallet addresses belonging to whales, which are defined as entities holding ≥1000 BTC.
The shift back into accumulation mode by these large players, often considered “smart money” in the space, could be a harbinger of a renewed uptrend. Bitcoin’s price had retreated from all-time highs near $100,000 in December amid heavy profit-taking that saw whales offload over 1 million BTC since September. But with those sell pressures now abating, the coast may be clear for the next leg higher.
“Whales have been a key driver of bitcoin demand and price action. Prominent recent buyers include MicroStrategy and KULR, so their return to accumulation is a bullish sign for BTC.”
– Ki Young Ju, CEO of CryptoQuant
Profit-Taking Pressures Ease as Selling Dries Up
One major factor enabling whales to resume buying is the sharp drop-off in selling pressure after heavy profit-taking in December. At bitcoin’s peak near $100,000, long-term holders were realizing profits as high as $10 billion per day. But those sell pressures have now normalized with unrealized profit margins back near zero – a level that often acts as a price floor during bitcoin bull markets.
On-chain data also shows that long-term holders, who tend to time market cycles well, have already distributed over 1 million BTC since September. This suggests that most of the “smart money” selling may have already occurred, paving the way for renewed accumulation. If prior cycles are any guide, a return of long-term holder supply back to an upward trajectory would be a firmly bullish catalyst.
Institutional Bitcoin Adoption Could Accelerate Under Trump
The resurgence of whale buying notably coincides with the start of Donald Trump’s presidency, which many crypto observers predict will be a boon for institutional bitcoin adoption. During his campaign, Trump voiced support for crypto and stated his intention to “build a strategic bitcoin reserve” to buttress the dollar and hedge against inflation. If such plans come to fruition, it could spark a new wave of demand from other nations, corporations and financial institutions seeking to follow suit.
Already, there are rumblings that the new administration may tap crypto-friendly regulators for key positions at agencies like the SEC and CFTC. Compared to the hostile stance taken by some officials in the prior government, a more accommodating regulatory approach under Trump could give more institutions the green light to allocate some of their treasury into bitcoin as an inflation hedge or “digital gold.”
On-Chain Indicators Flash Bullish Signs
Beyond the whale accumulation, several other on-chain indicators are pointing to bullish undercurrents for bitcoin despite the recent dip from December’s highs:
- Miner balances have started climbing again, signaling that sellers have been exhausted in that cohort as well.
- Coin days destroyed remain low even after the price pullback, suggesting long-term holders are not rushing for the exits.
- Addresses with non-zero balances hit a new all-time high in the past week, reflecting growing adoption and network effects.
Taken together with the whale accumulation, these datapoints suggest that strong hands are once again dominating the market and supply dynamics are turning favorable for the next potential upswing. However, analysts caution that bitcoin will likely need to see a rebound in retail demand as well to fuel a sustained rally back towards the $100,000 price range.
“Bitcoin’s apparent demand has continued in expansion territory, but the rate of expansion has declined from 279K BTC in early December to 75K BTC today. Demand growth must accelerate again for prices to rally significantly.”
– CryptoQuant
While it remains to be seen if institutional adoption stemming from the new crypto-friendly administration in the U.S. can be the catalyst to reignite retail interest, it’s clear that the investor smart money is already positioning for that possibility. With the whales back in accumulation mode, it may only be a matter of time before the wider market catches on to the signal.
