After the inauguration of Donald Trump on January 20, Bitcoin (BTC) has remained in a range, trading between $101,000 and $110,000. However, a new report by CryptoQuant says that Bitcoin 'whales' are quietly returning to rally the main digital currency behind this normal price movement.
Bitcoin whales are back in collection mode
According to the reportBig holders of BTC – commonly known as Bitcoin 'whales' – have entered the accumulation phase again. Recent data shows a significant increase in the monthly percentage growth of BTC holdings among these large investors.
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In particular, Bitcoin whale holdings increased from a decline of -0.25% on January 14 to a growth of 2% by January 17, marking the highest monthly growth rate since mid-December. In absolute terms, these BTC deposits rose from 16.2 million on November 4th to 16.4 million as of January 24th.
The surge in the whale rally appears to be driven by several bullish developments early in the Trump administration. For example, the US president has already signed an executive order establishing a Working Group on Digital Asset Markets.
This Working Group was asked to propose a federal regulatory framework for cryptocurrencies – including a stable – within six months. In addition, the group will evaluate how a national digital asset pool could be created, fueling speculation about a strategic Bitcoin reserve for the US.
In addition to the growth in whale holdings, selling pressure for BTC has decreased significantly since the large profit taking in December. This aligns with recent report found that BTC profit-taking has fallen 93% since its peak in December. The report says:
Bitcoin holders realized daily profits as high as $10 billion with Bitcoin nearing $100K in December. However, daily profits have fallen to levels around $2-$3 billion in January, which suggests that market participants may have finished selling Bitcoin for the most part. In addition, the unprofitable profit margins of the traders have decreased to near zero, a level that usually marks the price floor during bull markets.
However, the report also highlights that overall Bitcoin spot demand has weakened over the past month, raising concerns about the likelihood of another bullish rally. Notably, the demand growth rate for Bitcoin has dropped from 279,000 BTC in early December to just 75,000 BTC at the time of writing.
Analysts Confident About Another BTC Rally
Despite demand on chain cooling, crypto analysts are still optimistic about another major price rally for Bitcoin. For example, a recent report recommended that BTC could target a price as high as $249,000 during the Trump presidency.
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another report with Bitfinex predicting that BTC will likely go to $200,000 by the middle of the year amid a moderate price pullback. However, a lot in charge on how the US Federal Reserve will handle interest rate changes this year.
From a technical perspective, BTC's cup-and-handle pattern projects price target as high as $275,000. At press time, BTC is trading at $106,074, up 0.1% in the past 24 hours.
Featured image from Unsplash, Chart from TradingView.com
