Bitcoin February flip! Retail dumps, whales prepare for the next leg up

The global crypto market saw moderate green indexes even though Bitcoin (BTC) failed to regain the $100k mark so far. It seems like investors are still looking for more bullish flags. Meanwhile, data reveals that the crypto whales are stacking up their holdings during this drop. 

The Fear and Greed Index is flashing “Fear” sentiment among traders in the digital assets market. The cumulative crypto market grew marginally over the last day to stand at $3.24 trillion. Bitcoin-linked exchange-traded funds (ETFs) resumed their inflow streak after a heavy drop, suggesting that investors are preparing for the next leg.

Bitcoin retail out, whales in

As per data shared by Santiment, crypto whales have been noticed on-chain adding more cryptos as mid-sized drops and volatile conditions hover around the market. It added that BTC whales are getting activated in February while retail traders have stayed out of the crypto market under these conditions.

Small retail traders who entered the markets in the past 6 months are liquidating, adding to the selling pressure. Data depicts that overall, February has recorded a surge of 135 such wallets that hold more than 100 Bitcoins. Meanwhile, there has been a drop of 138,680 wallets holding less than 100 BTCs. This makes up an ideal setup for the crypto market caps to rise but it could still take a few more weeks to see a bullish impact of whale accumulation in this phase.

Bitcoin has been on a roll over the past 3 months, rising from $67,000 levels straight to $100,000. BTC price has jumped by 30% in the last 90 days. However, it has seen a drop of 6% in the last 7 days, causing panic among investors. Bitcoin is trading at an average price of $98,947 as of press time.

According to SoSoValue, Bitcoin ETFs saw a total net inflow of $66.38 million on February 5. This is the second consecutive day of inflows after witnessing a massive outflow of $234 million on February 3.

All eyes on Trump’s crypto stance

The crypto market is stuck and waiting for the next step US President Donald Trump takes. Amid this players like Strategy (formerly MicroStrategy) are looking to bridge the gap between stocks and Bitcoin.  Strategy’s CEO Michael Saylor says there’s a 45% volatility gap between S&P 500 ETFs and Bitcoin.

The company is holding 471,107 BTC (worth $46.1 billion) and is aiming to offer products for investors seeking Bitcoin exposure with lower volatility. Despite fourth-quarter revenue of $120.7 million missing estimates of $123.25 million, Strategy went all-in on Bitcoin. It bought 218,887 BTC for $20.5 billion in Q4 alone.

On the other side, the European Central Bank is looking at Trump’s pro-stablecoin stance as a reason to fast-track the digital euro. ECB board member Piero Cipollone hopes it will push the EU to pass digital euro legislation faster.

The digital euro is designed as a non-US alternative to Visa, PayPal, and now USD stablecoins, which Cipollone calls “worrisome” for European banks. Meanwhile, the EU proposed digital euro legislation in June 2023, but progress has stalled. Now, policymakers are under pressure to finalize it by November when the ECB votes on whether to launch the currency.

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