Bitcoin’s price has continued to rise this week, with the leading cryptocurrency consolidating its place above $50,000. Interestingly, on-chain data shows that a certain category of investors had less to do with the recent rally, sparking talk about their participation in the current bull cycle.
Recent BTC Price Primarily Fueled by ‘Institutional Demand’
In a recent one message on XAnalyst Ali Martinez pointed out that there has been a marked decline in retail investor involvement in the Bitcoin market. This shift comes despite the recent rise in the price of the flagship cryptocurrency.
This revelation is based on the noticeable drop in the daily creation of new Bitcoin addresses. According to crypto intelligence platform Glassnode, this metric tracks the number of unique addresses that first appeared in a transaction of the native coin on the network.
Chart showing the number of new addresses on the Bitcoin network | Source: Ali_charts/X
Typically, more individuals tend to enter the market as Bitcoin’s value increases, often resulting in a spike in the number of new addresses to store and trade the coin. However, there is currently a discrepancy between the BTC price and the creation of new addresses.
According to Martinez, this curious trend indicates a lack of retail participation in the ongoing Bitcoin bull run. However, the crypto analyst linked the recent positive performance of the flagship cryptocurrency to the activity of institutional players.
This analysis appears to carry some weight, as it has been just over a month since the Securities and Exchange Commission approved trading of BTC exchange-traded funds in the United States. These investment products are issued and managed by some of the largest financial companies in the world, including BlackRock, Grayscale, Fidelity, and so on.
Bitcoin whales show the highest activity since 2022
Another revelation has emerged in the chain that goes some way to supporting the argument for greater institutional participation. According to analytics platform Santiment, BTC whale activity has increased recently and has reached the highest level in more than 20 months.
???? Regardless of the impressive volume that happens with it #Bitcoin #ETF‘s, there has been a clear turnaround in the level of $BTC‘s offering is held by wallets of different sizes:
???? 1K-10K $BTC portfolios: $12.95 billion added in 2024
???? 100-1K $BTC portfolios: down $7.89 billion by 2024(Continued) ???? pic.twitter.com/BL7Mrj6kLq
— Santiment (@santimentfeed) February 16, 2024
Santiment data shows that wallets holding 1,000 – 10,000 BTC are accumulating, adding roughly 249,000 coins (worth about $12.8 billion) in 2024 alone. However, it is worth it stating that a lower level of investors (100 – 1,000 BTC) have sold over 151,000 Bitcoin since the beginning of the year.
At the time of writing, Bitcoin is valued at $51,950, reflecting a decline of 0.6% in the past day. Nevertheless, the leading cryptocurrency has retained most of its weekly gains, gaining nearly 10% in the past seven days.
Bitcoin price hovering around $52,000 on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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