Key Points
- Bitcoin’s price has been stagnant due to declining whale transactions and reduced Open Interest.
- Investors who held Bitcoin for 6-12 months have been the most active sellers, contributing to the price stagnation.
The recent price stagnation of Bitcoin (BTC) below $100K has been largely attributed to the 6–12 month holder cohort. This group has been actively selling their holdings, leading to a lack of price movement. Additionally, a decline in whale transactions and a reduction in Open Interest also suggest a potential short-term sideways movement.
Over the last few weeks, Bitcoin’s price has remained relatively flat, with little upward movement. Despite expectations of a year-end rally, the cryptocurrency has failed to sustain levels above the $100,000 mark since mid-December, fluctuating mainly between $94,000 and $95,000. Currently, Bitcoin is trading at $95,657, marking a further 2.5% drop within the last day.
Investor Behavior and Market Sentiment
Analysts have been closely observing investor behavior to better understand the factors influencing Bitcoin’s price. According to CryptoQuant analyst Yonsei Dent, the Spent Output Age Bands (SOAB) indicator reveals that the 6–12 month holders have been the most active sellers during the recent Bitcoin rally. These investors, who likely purchased Bitcoin around the time of the spot ETF launch in early 2024, have been a significant source of selling pressure.
On the other hand, long-term holders, those who have held Bitcoin for over a year, have sold relatively little during this period. The Binary CDD (Coin Days Destroyed) indicator shows a decline in older Bitcoin sales in December compared to November, indicating that many long-term holders remain optimistic about future price increases and are holding onto their positions.
Open Interest and Whale Transactions
Bitcoin’s Open Interest, which represents the total value of outstanding Futures contracts and serves as a market sentiment barometer, has decreased by 0.69%, reaching a valuation of $60.68 billion. This decline, along with a 1.45% drop in Open Interest volume, suggests a reduction in speculative trading activity and a cautious approach from traders amid Bitcoin’s stagnant price movements.
Furthermore, Bitcoin’s whale transaction activity, often seen as a strong indicator of institutional or high-net-worth investor activity, has shown a sharp decline over the past month. Data from IntoTheBlock revealed that transactions exceeding $100,000 have decreased significantly, suggesting reduced market confidence or a temporary pause in large-scale accumulation.