Why has Bitcoin's price increase stalled?
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Why has Bitcoin's price increase stalled?
Bitcoin spot accumulation is still ongoing; otherwise, Bitcoin's price would likely be much lower than current levels.
Navigating Web3 tides with focused insightsBy: Matt Crosb
Translation: AididiaoJP, Foresight News
Despite continued institutional accumulation, Bitcoin's price performance remains lackluster, with supply-demand dynamics indicating long-term holders are taking profits.
In recent weeks, Bitcoin's price has left many investors puzzled. Despite heavy buying by institutions and treasury firms, the price has remained range-bound. Is this a myth of institutional accumulation, or are we simply witnessing a tug-of-war between supply and demand?
We dive into on-chain data, treasury holdings, and derivatives activity to separate fact from conspiracy and explain what’s truly driving Bitcoin’s price.
The Contradiction Between Institutional Accumulation and Stagnant Bitcoin Price
Over the past few months, ETFs and treasury firms are estimated to have collectively accumulated around 200,000 BTC. Overall, total treasury holdings now approach 1 million BTC. Yet despite this inflow, Bitcoin’s price pulled back from a brief peak above $120,000 to $108,000 and has since traded sideways.
Why hasn’t this institutional demand translated into higher prices? The answer lies in long-term holders taking profits. Since July, over 450,000 BTC has moved from long-term wallets into the hands of new short-term market participants. This distribution effectively offsets the bullish impact of institutional inflows on Bitcoin’s price.
Long-Term Holders Are Taking Profits
On-chain data clearly shows that investors who have held Bitcoin for four to ten years are selling. These holders accumulated BTC at prices far below current levels and are now realizing gains as Bitcoin hits new all-time highs.
This pattern is not new. Historically, long-term holders reduce exposure when retail and institutional demand drives prices up, then re-accumulate after markets cool down. Current data suggests this group is accelerating their sell-off, intensifying Bitcoin’s sideways price action.
The Impact of Derivatives
Another factor weighing on Bitcoin’s price is increased futures and options activity. Since July, open interest across exchanges has risen by approximately 50,000 BTC. While this doesn’t directly prove the existence of “leveraged Bitcoin,” it does indicate capital is flowing into leveraged bets rather than spot accumulation, limiting upward price pressure.
The CME futures and options markets have also expanded significantly, amplifying derivatives’ influence on short-term Bitcoin price movements. The net effect: more liquidity is locked in contracts, reducing direct buying pressure on BTC itself.
The Role of Supply-Demand Dynamics
Is Bitcoin’s price being manipulated by leveraged positions? Evidence does not strongly support this view. What we’re seeing is real-time supply-demand economics at work:
Institutions have cumulatively added 200,000 BTC.
Long-term holders have distributed 450,000 BTC.
Over 50,000 BTC is locked in derivatives markets.
Together, this explains why Bitcoin’s price remains stagnant despite headlines about institutional demand.
Where Is Bitcoin’s Price Headed Next?
While current conditions suggest continued consolidation in the near term, this doesn’t resemble a market top. If funding rates turn negative, a short squeeze could push Bitcoin higher again. For now, however, the imbalance between accumulation and distribution indicates sideways movement may persist.
In the broader picture, Bitcoin’s bull market remains intact. Investors worried about “leveraged Bitcoin” should remember: spot accumulation continues, and without it, Bitcoin’s price would likely be far below current levels.
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