Bitcoin Whales Halt Activity – Is BTC Heading Towards the $86.5K Danger Zone?

Bitcoin’s [BTC] momentum has slowed down, and the market atmosphere appears to be quieter than it has been in months.

Key Takeaways

Bitcoin's price momentum has slowed, leading to decreased activity from major buyers.
Dolphin wallets have reduced their BTC growth, indicating a potential decline in demand.
Long-term holders are also holding back on selling, easing market pressures.
Bitcoin is at a critical junction, potentially heading towards the $86,500 support level, which could lead to further declines if breached.

In conclusion, while the current market conditions show signs of weakening, some observers believe this could also set the stage for future opportunities as the landscape evolves. Investors should remain vigilant and monitor key market levels carefully.

bitcoin

Major buyers are not significantly increasing their holdings, long-term holders (LTH) are not heavily selling, and the price has dipped below crucial levels. We find ourselves in a precarious position, suggesting we may enter a period of stagnation.

However, could this also be the beginning of something more substantial?

Signs of Weakness Emerging

The upward trend of Bitcoin is showing signs of weakness, with the first indication being the decrease in growth among dolphin wallets (those holding between 100 and 1,000 BTC). According to CryptoQuant's Julio Moreno, this group had added about 965,000 BTC year-over-year at its peak, but that growth has now declined to 694,000 BTC.

bitcoin Source: CryptoQuant

This group includes Exchange-Traded Funds (ETFs) and publicly traded companies, indicating that some of the most significant buyers in the market have momentarily halted their acquisition of Bitcoin. When crucial buyers stop accumulating, Bitcoin's potential for further gains diminishes.

Currently, the strongest buyers seem to be retreating from the market, coinciding with corporate treasuries that hold Bitcoin facing visible pressure. The combined market cap of major firms heavily invested in Bitcoin, such as MSTR, Metaplanet, and XXI, has fallen dramatically from approximately $152 billion in mid-July to a mere $73.5 billion.

Source: X

Despite these market strains, these firms are holding their Bitcoin positions steady as they navigate the current market conditions.

Reduction in Selling from Long-Term Holders

In addition to the slowdown in major buyers, long-term holders (OGs) have also decreased their selling activity. The 90-day daily average of spent UTXOs from coins held for over five years has dropped from about 2,350 BTC to approximately 1,000 BTC.

bitcoin Source: X

These coins were originally purchased at around $30,000, and selling typically occurs when they are moved. With their activity now reduced, a significant source of selling pressure has begun to ease.

Furthermore, each cycle’s STXO peaks among this group are becoming smaller, indicating that long-term holders are reacting less actively as the market matures.

Bitcoin at a Crossroads

With reduced selling pressure, the spotlight now shifts to Bitcoin's next move—and the current charts offer little reassurance.

Bitcoin has already dipped below the $89,800 level, an important threshold that many traders were closely monitoring. According to Joao Wedson of Alphractal, losing this support raises the likelihood of entering a prolonged sideways phase, particularly since Bitcoin has also failed to maintain critical on-chain levels. The next significant line rests at $86,500.

If Bitcoin falls below this mark, Wedson cautions that the subsequent stop could be around $80,500. This scenario would establish a new local low but might also create a cleaner opportunity for traders willing to wait patiently.