Bitcoin is caught in a tug-of-war between profit-taking whales and long-term holders, a standoff that one on-chain report says could shape the market for months.
After hitting a record high of $123,300 on July 14, the crypto market has drifted lower, awaiting a fresh catalyst.
On-chain data firm CryptoQuant said the pullback marks the third major wave of whale profit-taking since mid-2024, in a report on Thursday.
The observation is supported by Sean Dawson, head of research at on-chain options platform Derive, who told Decrypt that the profit-taking came from both “old and new whales.”
In crypto markets, “whales” are large holders whose trades can move the price of an asset.
Still, selling pressure wasn’t limited to whales, Dawson added. Miners also sold approximately 15,000 BTC immediately after the new all-time high was reached.
“The size and scale of these trades suggest these are probably institutions content with their returns and seek to de-risk after forecasting a rough Q3 ahead.”
This “cooling phase” is a key characteristic of a mature bull market, and it aligns with Bitcoin’s historical performance, which shows that the third quarter typically produces minimal median returns.
The market appears to be preparing for this, according to Dawson, who notes that options traders are “gearing up for a rough two months” by buying $80,000, $95,000, and $100,000 put options for August and September.
These traders “are expecting a price reversal of somewhere between 10-30% over the next month,” Dawson said.
Charles Edwards, founder of Capriole Fund, pushed back against short-term bearish sentiment on Thursday, calling Bitcoin “undervalued” based on his Energy Value model.
The model, which ties Bitcoin’s intrinsic value to the energy used by its mining network, suggests the asset is trading well below its fundamental worth.
CryptoQuant expects “renewed accumulation and a subsequent breakout to a new all-time high,” a view supported by historical trends showing Bitcoin’s fourth quarter typically delivers the strongest gains, with a median return of 52%.