Bitcoin's $108,000 rally faces skepticism as long-term holders absorb supply

Bitcoin’s (BTC USD) recent surge above $106,000 last week sparked renewed optimism among investors. However, a closer examination of on-chain signals reveals a more nuanced picture, suggesting that the rally may not be as robust as it initially appears.

During the period from June 15 to June 24, over 1.02 million BTC were transferred into long-term holder wallets. This significant accumulation marks one of the largest such movements since early 2023. Concurrently, newer whale entrants reportedly incurred realized losses amounting to $228 million over just 10 days. This dynamic indicates that while short-term speculative participants are exiting, long-term holders are stepping in, absorbing the supply. This trend is generally seen as a bullish sign, as it suggests a transition from short-term speculation to long-term investment, preparing for extended market cycles.

Despite this accumulation, Bitcoin’s price did not sustain its upward momentum. Instead, it faced rejection near the $108,000 mark and retraced to test the $104,000–$105,000 zone. This price action raises questions about the underlying strength of the rally.

Retail traders also played a significant role during this period. Around June 20–23, there was a surge in user inflows to Binance, reaching levels not seen since May 2022. This activity coincided with Bitcoin’s recent local top, suggesting that fresh buyers may have entered the market at overheated levels. Historically, such inflows to centralized exchanges, particularly from smaller wallets, often indicate FOMO-driven buying. When this aligns with stagnant spot volume or declining whale activity, it frequently marks short-term tops. This adds to the growing list of signals suggesting that the rally from approximately $100,000 to $108,000 lacked fundamental support.

Another notable shift is the reactivation of previously inactive BTC wallets, some of which have been dormant for over 3–5 years. While the volume of these movements is not massive, such reactivations typically occur when long-term holders feel pressure or see an opportunity to reposition. In the current market scenario, this repositioning could be seen as a red flag, with even the oldest holders waking up, possibly to sell into the strength. The broader trend of BTC moving into long-term holder wallets has not translated into a meaningful price breakout, hinting at underlying hesitation despite the apparent accumulation.

The recent surge in Bitcoin’s price, from $100,000 to $108,000, appears to have been driven more by leveraged bets than genuine spot buying. Open interest in futures climbed consistently, but spot inflows remained muted, suggesting that traders, rather than long-term buyers, were behind the move. With futures premiums shrinking and funding rates softening, the lack of follow-through in spot markets is now being reflected in the price retrace.

Looking ahead, Bitcoin’s holdings above the $104,000–$105,000 region will be crucial in determining the near-term direction. A break below this level could confirm that the rally was structurally weak, driven more by leverage and retail inflows than organic demand. Conversely, if long-term holders continue to absorb supply while whales exit, it may set the stage for a stronger base. However, if these participants start selling as well, Bitcoin’s current range could give way to deeper losses.