Bitcoin’s price has delivered disappointing performances in recent sessions, with the crypto entering a new consolidation phase between $88,000 and $91,000 – a range where it previously broke out.
The debate over whether the market has entered a broader bearish phase has reignited, with data points supporting both sides. Several structural and on-chain factors continue to play a role and will likely shape Bitcoin’s next big move.
Investor profitability remains central
Bitcoins [BTC] Short-term stability appears increasingly related to market structure, in particular the share of supply in profits. Analysts often describe this condition as latent gain – a scenario in which investors are more likely to hold onto shares rather than sell them.
According to CryptoQuant, such an environment typically occurs when at least 75% of Bitcoin’s circulating supply makes a profit. At that level, investor sentiment generally remains constructive, reducing the likelihood of heavy selling pressure.
Source: CryptoQuant
While Bitcoin briefly moved into this zone, the metric has since fallen to 71.5% of the supply of gains. A sustained decline could increase downside risk, potentially pushing the price towards the lower $80,000 range.
That said, the road to recovery remains intact. A recovery back to the 75%-80% supply-to-earnings range would likely restore relative stability and support a continued uptrend.
Commenting on the setup, on-chain analyst Darkfost said the market “should be able to stabilize and build a much stronger foundation for a truly bullish recovery.”
Whales intervene when retail leaves
Whale conviction has remained strong – and appears to have strengthened – despite increased volatility so far in January.
Retail investors, who typically hold smaller Bitcoin positions and operate on shorter time horizons, have continued to sell into weakness. Whales, on the other hand, have taken the opposite approach.
These large holders, who control a significant portion of Bitcoin’s supply, can influence the broader market direction. In fact, data shows that the monthly increase in whale stocks has risen to the highest level since early January – underscoring continued accumulation. At the time of writing, whale balances stood at almost 3.2 million BTC.
Source: CryptoQuant
This also seemed to be in line with rising inflows into accumulation addresses, confirming that some of these large holders may be active buyers.
All things considered, it can be said that some investors see current price levels as an opportunity to accumulate Bitcoin at a perceived discount. It could also mean they are positioning themselves for a continuation of the broader uptrend.
Long-term holders remain unfazed
Finally, the actions of long-term keepers also seemed to be consistent with whale behavior.
The Binary Coin Days Destroyed (CDD) metric, which ranges from 0 to 1, helps track whether long-held Bitcoin is moving. Values closer to 1 generally indicate greater activity, often associated with selling, while a value close to 0 means long-term investments remain inactive.
Source: CryptoQuant
Currently there is the Long-Term Holder Binary CDD stays at 0, indicating that these investors continue to hold their positions and maintain a long-term view on the price.
For now, the combined behavior of whales and long-term holders suggests that only an additional 3.5% of Bitcoin’s supply would need to return to profit to bring the market back to the 75% threshold. This is a level that has historically been associated with greater stability and a stronger price structure.
Final thoughts
- Bitcoin’s earnings offer remains a critical indicator to assess whether the market is sliding into a bearish phase or positioning itself for a renewed bullish move.
- As retail investors continue to pull back, whales have increased their exposure.