- Bitcoin network fees dropped by 65.95%, reflecting reduced transaction volume and demand.
- Large Bitcoin investors, holding 100-1,000 BTC, continue to accumulate despite price declines.
- Short-term holders face losses, while historical trends suggest a market peak around mid-2025.
According to a recent analysis by IntoTheBlock, Bitcoin’s market behavior can be divided into two categories: short-term holders and long-term investors. The analytical platform revealed different dynamics in the Bitcoin network activity, fees, investors’ behavior, and historical trends that can affect future cycles.
Decline in Bitcoin Network Fees
According to a recent report, Bitcoin network fees, an important parameter of the market, dropped by 65.95%, the lowest since February 2023. This decline is in stark contrast to Ethereum whose weekly fees increased by 13.38% within two weeks since it had reached the lowest record. The BTC fees have been decreasing as a result of the decrease in the number of transactions, which may point towards lower immediate need for the asset.
However, with falling prices and lower network activity, the large BTC investors, particularly those with 100 to 1000 BTC, kept buying the asset. About $728 million worth of BTC were removed from exchange wallets in the past week, and this indicates that large investors, known as ‘whales,’ are optimistic about the future price of a cryptocurrency. These investors are thus currently in a position to hold 20.3% of the circulating supply will be burned, which is equivalent to 4.01 million BTC.
Impact of Federal Reserve Rate Cuts
The crypto traders are paying close attention to the Federal Reserve’s rate decision that is expected in the coming days. In the past, rate cuts have acted as a positive sign for risky assets including BTC. A 25 basis point cut is possible from the Fed and this may lead to the prices of Bitcoin increasing in the future. Nevertheless, the cut of 50 basis points may signal a recessionary environment, which in turn may lead to a more severe selloff.
The short-term Bitcoin investors especially those who invested at the recent market peak are now in losses. Those who bought Bitcoin at prices between $47,000 and $64,000 are in a rather negative situation, as only 27.6% currently in profit. This group may come under pressure if there is another decline in the market, and could possibly decline further.
Historical Patterns and Future Outlook
The value of Bitcoin has once again suffered a dip with the price falling by 12.3% since the last halving in April 2024, from $63.9K to $56K. From the history, the price of Bitcoin has been seen to rise 480 days after the process of halving has taken place. If this pattern is followed, the market peak may happen at mid-2025. Big investors seem to be unperturbed by present market conditions, as they keep on buying BTC, a sign that they expect prices to rebound.
The behavior of both short-term holders and long-term holders will be decisive in the further development of the Bitcoin market cycles. Nevertheless, historical trends are quite informative, and the most important task is to observe the market developments in the following months.
