According to on-chain data, “permanent holder addresses” of Bitcoin have accumulated nearly $23 billion in assets over the past month.
In a post on X on August 7, CryptoQuant founder and CEO Ki Young Ju exclaimed:
“I’m pretty sure something is happening behind the scenes.”
This comment relates to the changing demand in the last 30 days from permanent Bitcoin holders.
Ki noted that around $22.8 billion (approximately 404,448 BTC) has been moved to permanent holder addresses in the past 30 days, “and that is clearly accumulation.”
He predicts that within a year, some institutions such as TradFi organizations, corporations, governments, or other entities “will announce that they bought Bitcoin in Q3 2024. And retail investors will regret not buying due to fears about German government sales, Mt. Gox allocations, or any ongoing bad macroeconomic scenarios.”
In a post on X on August 7, Ki Young added several other bullish factors like Bitcoin mining activity.
“Miner capitulation is almost over,” he said, adding that the hashrate is near an all-time high and the cost of mining in the U.S. is about $43,000 per coin, so the hashrate is likely to stabilize unless the price drops below this level.
“Retail investors are mostly absent, similar to mid-2020. Activity from old whales has declined, with long-term holders over three years selling from March to June but no significant selling pressure from old whales at this time.
“Based on the data, I believe the bull market remains intact. If the market doesn’t recover in two weeks, I’ll reconsider. I follow smart money flows, so if I’m wrong, it means these new whales are mistaken or have underestimated the macro environment.”
At the end of July, he observed flows into permanent holder addresses like Bitcoin ETF funds and said not all remaining BTC is in custody wallets, but “clearly, whales are accumulating to unprecedented levels.”
Accumulation seems to have increased since the market downturn on August 5, pushing BTC prices down to $49,800.
The asset has since rebounded 14% to regain $57,000 on August 6. Moreover, Bitcoin’s Fear and Greed Index has moved from “extreme fear” to a level of 29. While this still reflects “fear,” it shows a slight improvement in sentiment.
Bitcoin Volatility Hits 20-Month High
A key Bitcoin volatility indicator has reached its highest level in 20 months after Bitcoin fell below $50,000, and futures traders now anticipate the price may drop further.
Meanwhile, trader Yoddha claims this could be the “best buying opportunity of 2024.”
Source: Yoddha
According to CoinMarketCap data, Bitcoin’s Volmex Implied Volatility Index hit 97.14 on August 5, the same day Bitcoin rapidly dropped to $49,813.
This is the highest level since November 2022, the month the FTX exchange collapsed.
24-Hour Put-Call Volume Ratio Signals Bearish Sentiment
Despite the price recovery, futures traders are still speculating that there could be more weakness ahead.
Ed Hindi, CIO of Tyr Capital, said:
“Traders are actively buying Puts and Put Spreads on both BTC and ETH to hedge their positions against further declines.”
The Put-Call volume ratio measures Bitcoin’s demand for Puts (sells) versus Calls (buys). According to CoinGlass data, there are currently 46.94% Calls and 53.06% Puts in the last 24 hours, resulting in a Put-Call ratio of 1.13.
“The Put skew is extremely well bid. This may be a sign that the market is oversold,” Hindi added.
Hindi believes there could be further declines but not to the extent of “violating” $45,000.
“Whether we trade below that level will depend on how far we are from the end of the JPY carry trade*. We believe we are nearing the end.”
However, another metric, Bitcoin options volume, dropped 39.73% in the 24 hours of August 6, signaling futures traders’ uncertainty about Bitcoin’s price direction.
*JPY carry trade is a financial strategy where investors borrow money in Japanese Yen at low interest rates and invest in higher-yielding assets, primarily those denominated in USD or EUR.
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