Bitcoin News Today: Bitcoin Rally Driven by Liquidity Shortage Whale Accumulation ETF Demand

Bitcoin’s 2024 price surge has drawn increasing attention from analysts, who suggest that the rally is being fueled by a combination of tightening liquidity and strong accumulation by large holders, or "whales." This dynamic, alongside the rise of institutional Bitcoin Spot ETFs, has created a supply squeeze that supports the cryptocurrency’s sustained price increase[1].

According to recent data, Bitcoin has maintained a price above $100,000 for 89 consecutive days, demonstrating fundamental strength beyond typical retail-driven speculation. This resilience is attributed to a consistent outflow of BTC from centralized exchanges, with CryptoQuant analyst Axel Adler noting that since late February 2024, outflows have exceeded inflows on most days, signaling a reduction in available liquidity and contributing to upward price pressure[1].

The shrinking liquidity is further compounded by whale activity. Data from Checkonchain reveals that large holders have been in strong accumulation mode, with the Whale to Exchange Balance Change remaining negative for three consecutive months. This indicates that whales are increasingly withdrawing Bitcoin from exchanges and holding onto their assets rather than selling, despite realizing substantial gains. As of now, whale exchange balances stand at -73,000 BTC, with mega whales at -19,000 BTC, reinforcing the trend of long-term holding[1].

In parallel, institutional demand has played a key role in tightening Bitcoin’s liquidity. The approval and launch of Bitcoin Spot ETFs in early 2024 have led to institutional and investor holdings surpassing 1.3 million BTC, valued at over $149 billion. This significant accumulation has effectively removed a large portion of Bitcoin from the spot market, contributing to an ongoing supply shortage and supporting the price rally[1].

The scarcity of Bitcoin is further highlighted by its rising Stock-to-Flow (S2F) ratio, which has reached 369.4K BTC according to Bitbo. The S2F model, which compares existing supply to new production, is often used as an indicator of scarcity. A higher ratio typically correlates with increased demand and higher prices. Based on this model, the projected price of Bitcoin could reach $3.2 million in the long term, although this is a theoretical calculation rather than a forecast[1].

Market observers are also noting the behavioral shift from retail-driven speculation to whale-led accumulation. Unlike previous price cycles, the current rally is supported by strong institutional and large-holder demand, reducing the influence of short-term retail investors. This shift has led to a more stable and sustained price environment, with analysts suggesting that if whale accumulation and ETF inflows continue, Bitcoin could break through the $117,000 resistance level and potentially set new all-time highs. However, if large holders begin to sell, a deeper correction may follow, with support expected near $110,572[1].

The liquidity shortage is primarily driven by continuous outflows from exchanges, whale accumulation, and growing institutional demand via Spot ETFs. These factors together have limited Bitcoin’s availability in the spot market and intensified the sense of scarcity, which is now a key driver of its price performance.

As Bitcoin’s market dynamics continue to evolve, analysts are closely monitoring whale behavior and ETF inflows for potential signs of trend changes. The current rally, supported by fundamental demand and reduced liquidity, suggests a stronger and more resilient market structure compared to previous cycles.

Source: [1] Bitcoin Rally May Be Driven by Liquidity Shortage and Whale Accumulation, Analysts Suggest (https://en.coinotag.com/bitcoin-rally-may-be-driven-by-liquidity-shortage-and-whale-accumulation-analysts-suggest/)