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Highlights
- Institutions buy $100B BTC as retail investors panic.
- Long-term holders' distribution nears end, indicating potential price reversal.
- Retail capitulation reaches peak, signaling potential market bottom
Bitcoin (BTC) remains bullish on the longer time frames, but retail investors are panic selling after a crash below $100K again. Institutions remain vigilant as always, accumulating nearly $100 billion worth of BTC in 2024. Why? Let’s explore.
Institutional Buying Spree Snaps Up Nearly $100 Billion BTC
Institutions have been aggressively buying Bitcoin since the ETF approval. According to data platform Arkham Intelligence, BlackRock, MicroStrategy, and Fidelity have collectively purchased ~$100B worth of BTC.
Specifically, BlackRock, the world’s largest asset manager, alone bought $50B, while MicroStrategy, a software giant, managed to accumulate $24B worth of BTC. Fidelity stands on the low end after acquiring BTC worth $20B. This significant buying pressure, even with OTC deals, could impact BTC’s price in the ongoing bull run.
BLACKROCK BOUGHT $50 BILLION BTC IN 2024
MICROSTRATEGY BOUGHT $24 BILLION BTC
FIDELITY BOUGHT $20 BILLION BTCZoom out. pic.twitter.com/d2oyqtCM2z
— Arkham (@arkham) January 10, 2025
Long-Term BTC Holders’ Distribution Nears End
Glassnode data shows that long-term holders were distributing their BTC, even at prices 12% below the all-time high. However, the 30-day percent change in long-term holder supply suggests that the distribution rate has likely peaked, aka coming to an end. This development indicates that long-term holders are likely done selling
Historically, when long-term holders finish distributing their coins, the price of BTC tends to reverse the downtrend and kickstart a rally.
LTH Long/Short-Term Holder Supply Ratio
Retail Capitulation Reaches Peak
CryptoQuant’s data on retail investors’ demand change shows peak capitulation from short-term holders. This indicator tracks retail investor volume, ranging from $0 to $10K. This indicator hit –22%, and history shows that such a steep decline in retail demand often indicates retail capitulation, which is where markets tend to bottom.
Why Are Retail Investors Panicking?
Generally, retail investors are inexperienced and lack patience. Moreover, these investors are trying to hit it big, which often leads to them going all in with high leverage making them more susceptible to noise and short-term price movements. Hence, the recent drop in Bitcoin price below $100K has caused panic and capitulation.
Often, long-term or smart investors buy from the panic-selling retail. This wealth transfer is often followed by a massive rally, leaving unsuspecting retail investors poorer than when they decided to invest.
Regardless of this capitulation, the outlook of Bitcoin looks massively bullish, but a majority of retail investors are always caught on the wrong side. These signs often signal and allow smart traders to position themselves before a massive rally kickstarts.
What’s Next for BTC Price in 2025?
Here’s a crypto analyst’s take on why Bitcoin price could be forming a bottom around $90K to $91K, signaling the next leg of bull run.
Is Bitcon Bottom In? Most likely.
January 9's swing low ($91,151) could be the bottom. If not, then a sweep of $90,835 with a bullish swing failure pattern could suggest that a bottom is imminent.
https://t.co/H2Spj0mvEM pic.twitter.com/ohZ0zmlIsB— MAXPAIN (@Mangyek0) January 10, 2025
If this outlook is true, and Bitcoin is forming a bottom, it could be preparing to resume the uptrend and explore new highs. Here are some targets for this next phase as noted in our 2025’s bold Bitcoin price predictions, the cycle top could form anywhere between $150,00 to $250,000.
“CMT Analyst Adrian Zduńczyk is a firm believer that Bitcoin will peak at around $225,000 this cycle and is expecting BTC to transition from optimism to a belief phase.”
Furthermore, several institutions and banks are also expecting a similar move from BTC in 2025.
“Standard Chartered expects BTC price to hit a peak of $250,000 in 2025. Geoff Kendrick, the bank’s head of digital asset research, noted that spot Bitcoin ETF flows could hit $50 to $100 billion by 2026. Fundstrat Global Advisors’ Tom Lee also shares this outlook.”
Conclusion
The convergence of institutional buying, long-term holders finishing their distribution, and retail investors’ capitulation is a perfect storm, signaling a bottom and an impending significant Bitcoin price rally. As institutions continue to invest in BTC, the stage is set for a potential bull run, with some analysts predicting a cycle top between $150,000 and $250,000.
Frequently Asked Questions (FAQs)
1. Which institutions have been buying Bitcoin aggressively?
2. What does the distribution of long-term holders' BTC supply indicate?
3. What is the predicted cycle top for Bitcoin in 2025?
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