Large Bitcoin Holders Increase Accumulation Amid Market Volatility

In a notable display of confidence, substantial holders of bitcoin (BTC) have ramped up their accumulation at an accelerated pace this July, seizing opportunities presented by the market’s price fluctuations. These large holders, defined as addresses that possess at least 0.1% of BTC’s circulating supply, purchased over 84,000 BTC, amounting to approximately $5.4 billion at current market prices. This marks the most significant single-month increase in terms of BTC since October 2014.

The accumulation trend was characterized by strategic bargain hunting during a price dip in early July, which saw BTC fall below $55,000. This was followed by brief pauses during the subsequent rally that pushed prices up to $69,000. By the end of July, BTC recorded a modest gain of just 3%, as indicated by data from CoinDesk.

Analysts suggest that this strategic accumulation reflects a strong conviction among large holders that the ongoing consolidation phase between $50,000 and $70,000 will eventually lead to a bullish breakout, extending the initial recovery that began from a low of $16,000.

Market experts are optimistic about Bitcoin’s potential price trajectory. Jag Kooner, Head of Derivatives at Bitfinex, noted in an email, “A rate cut in September could instill a sense of bullishness and generally enhance liquidity in the market. This would be beneficial for Bitcoin and other cryptocurrencies as investors seek higher returns beyond traditional assets. Such a scenario could exert upward pressure on Bitcoin’s price and amplify ETF inflows as investors position themselves in a more favorable environment for risk assets.”

On Wednesday, Federal Reserve Chair Jerome Powell indicated that interest rates might be reduced as soon as September, provided that economic data supports such a decision. The central bank maintained its benchmark interest rate within the 5.25%-5.50% range, keeping a status quo as anticipated.

ING highlighted in a daily note to clients, “The Fed has been attempting to achieve a ‘soft landing,’ and if the data allows for a rate cut—especially as it appears to be moving in that direction per their forecasts—we believe they will take the opportunity. We expect officials to shift from a ‘restrictive’ monetary policy to a ‘slightly less’ restrictive one starting in September, with additional cuts likely in November and December.”

Furthermore, the bullish sentiment in the market has been bolstered by renewed capital inflows through stablecoins—digital assets whose values are pegged to external benchmarks like the U.S. dollar. According to CCData, the total market capitalization of stablecoins grew by 2.11% in July, reaching $164 billion, marking the highest level since April 2022. “This is the most significant monthly increase in stablecoin market capitalization since April, indicating new capital inflows into the markets, as evidenced by the positive price movements of digital assets in July,” CCData reported in an analysis shared with CoinDesk.

Kooner remarked on the market’s resilience, stating, “There is a palpable sense of confidence in the market currently, particularly as even potentially negative news—such as the Mt. Gox Distribution, the German Government’s selling, and various significant on-chain movements—have not managed to substantially affect Bitcoin’s price to the downside.”