The accumulation of Bitcoin in custodial wallets is very strong.

2. Binance, the largest cryptocurrency exchange, has increased its reserves as of early 2024.

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Introduction

Bitcoin (BTC) is showing signs of accumulation despite its price drop below the $60,000 range. Its ETF inflows have been positive over the past few days, which is an encouraging sign for its market sentiment.

Data shows that the U.S. spot Bitcoin ETF data on July 11 is as follows:

• Net inflow of US$79 million;

• $1.3 billion in trading volume;

• Most trades were completed at $57,810 (same as yesterday);

• Funds have been flowing in for 5 consecutive days.

So, there is a huge amount of buying pressure behind Bitcoin, but is it enough to overcome the correction of the past month? Should traders prepare for a quick recovery, or wait for a consolidation phase?

Permanent holders increase their positions

Crypto analyst Axel Adler noted in a post on X (formerly Twitter) that 41,000 BTC has been added to Binance reserves since Bitcoin began its correction more than a month ago.

The exchange accumulated BTC for its reserves and liquidity purposes. The accumulation in January 2024 was followed by a strong price increase to over $40,000.

If they have been buying the dips for a month based on their experience and expertise, this is perhaps not surprising. Traders may not want to view this as actionable information, but rather as a basis for thinking about their next move.

Source: Ki Young Ju on X

CryptoQuant founder and CEO Ki Young Ju noted that during the price drop, custodial wallets with no outflows have been increasing. They have accumulated 85,000 BTC in the past month, while 16,000 BTC has flowed out of ETF reserves.

This means that smart long-term holders are accumulating Bitcoin, while more retail-focused ETFs are responding to pressure from clients, revealing a possible divergence between smart money and retail sentiment.

Whale Behavior

The whale group holding 1,000-10,000 BTC has been selling since mid-May, which is a panic. However, the whale group holding 10,000-100,000 BTC actively accumulated in late May, but sold a considerable portion in late June.

At the same time, the number of small wallets holding 100-1000 bitcoins is also increasing.

Axel Adler's chart highlights the importance of not losing your mind as there have been many instances of sharp price declines in previous cycles.

And the current phase may not be over yet, based on the data at hand, the price bottom may be close, but it is not clear how close, and traders need to be prepared for the possibility that the $54,000 support level may be temporarily lost.

German government selling pressure eases

According to Spot On Chain, in the past 16 hours, the German government address has sold another $376 million worth of Bitcoin, selling 10,627 Bitcoins ($616 million) at an average price of $57,976, and recovering 4,169 Bitcoins ($240 million) at an average price of $57,469. Currently, the German government address only has 9,094 BTC ($520 million), which is about 18% of the initial amount. At this rate, it may sell all Bitcoin in the next 1-2 days.

Mentougou Selling Pressure

Data shows that as of July 12, 138,000 BTC are still in Mentougou’s account address. It can be considered that the selling pressure from Mentougou has not actually entered the market. The decline on July 5 was a partial realization of the expected decline in Mentougou’s selling pressure.

If the compensation from Mentougou is sold out within a month, the selling pressure faced by the market will be highly similar to the German government's selling, with the amount and time of selling being similar. According to the current demand for ETFs, it cannot provide sufficient support, and the price of BTC may fall further. If the compensation from Mentougou lasts longer (2-3 months), the amount of BTC entering the market every day will not be particularly large, and will not cause a one-time decline. However, due to the continued expectation of selling pressure, there may be a period of volatility to digest the selling through volatility. This also means that it is difficult for the main rising wave to come in the short term.

At present, only 1,545 Mentougou tokens have actually been transferred to the exchange, and the remaining tokens are still in Mentougou’s account. It can be considered that the actual selling pressure has not yet entered the market. When the BTC held by Mentougou is distributed on a large scale to several trading platform addresses, it may cause a large panic drop, thus forming a plunge pin. When specific individuals sell, due to the dispersion and difficulty in tracking and observing, it may not necessarily cause a significant drop in price.

Patience is key

While Bitcoin has been experiencing a downturn in recent times, it is worth noting that an analysis of the Puell Multiple shows that the expected bull run may not yet be here.

The Puell Multiple shows the difference between short-term and long-term revenues for Bitcoin miners. It does this by dividing the daily issuance of BTC by the 365-day issuance.

Generally, if the ratio is between 1 and 6, it indicates that prices are higher. If the ratio is over 6, it means that prices may have peaked.

On the other hand, if the Puell Multiple is below 1, it indicates a price decline, and values ​​below 0.40 suggest that prices have bottomed.

According to CryptoQuant, Bitcoin’s Puell Multiple is 0.64, indicating that a correction is still ongoing. However, if the ratio reaches 0.40, it could indicate that Bitcoin has bottomed and a rebound could follow.

However, it is worth noting that it may take another month or so for Bitcoin to bottom out. If this is the case, the bull run may not occur until the beginning of the fourth quarter or near the end of the third quarter.