Bitcoin’s price has climbed to $96,500, pushing short-term whales back into profit, with analysts noting reduced selling pressure could bolster market stability. Critical metrics suggest confidence from miners and long-term holders, although seasonal trends and macroeconomic factors must be monitored as they may impact future performance. Traders are advised to set clear risk limits amid potential fluctuations.
In recent news, Bitcoin’s price surged over 12% last week, hitting the impressive $96,500 mark. This rise has put short-term whales—those who bought Bitcoin in the last six months—in the green. According to crypto analyst JA Maartunn from CryptoQuant, these whales have crossed their break-even price of $90,890, which means they’re now making a profit and are less likely to sell their holdings. This shift is believed to lend stability to the otherwise volatile market.
As the market stands, short-term whales, who have held their Bitcoin for under six months, are seeing their profit margins grow as prices exceed their average purchase point. Historical patterns suggest that when these whales turn profitable, they often reduce their selling activities, effectively decreasing downward pressure on prices. Data from CryptoQuant shows a graphical representation where the rising orange line, indicative of short-term whale costs, moves towards the white line that reflects the current market price. This trend indicates that most of these holders stand to gain if they decide to sell now.
On-chain data supports this optimistic view. For example, the current funding rates on perpetual swaps remain negative, signalling that many traders are heavily betting against Bitcoin. If this buying momentum continues, we might see a significant squeeze for those short positions. Moreover, long-term holders are gradually accumulating more Bitcoin, and the network hash rate has reached an all-time high of 1.04 ZH/s this month. These metrics explain why miners and long-term investors are feeling confident about sustaining the rally.
Looking ahead, the outlook isn’t without its concerns. Seasonal trends traditionally see a slowdown in Bitcoin gains during the summer months. On average, Bitcoin typically sees a 26% increase in Q2, but the median returns since 2013 have been much lower at around 7.6%. There have been notable drops too, such as the staggering 56.2% decline in Q2 of 2022. Q3 also tends to struggle, with average returns of only 6% and frequently negative medians.
The impending arrival of May raises questions about the so-called “sell in May” phenomenon that often affects equities, notably the S&P 500, which has only managed a return of 1.8% from May to October since 1950. Additionally, macroeconomic factors play a crucial role; US inflation has relaxed to 2.4%, and there are market expectations for Fed rate cuts in 2025. A weaker dollar also favours risk assets like Bitcoin, and a notable $3 billion in net inflows into spot Bitcoin ETFs in late April shows substantial institutional interest.
In summary, while whale profits, robust on-chain data, and positive macroeconomic conditions seem to underpin Bitcoin’s current rally, traders should remain cautious. Seasonal headwinds, along with potential imbalances in derivatives trading, indicate the importance of setting clear risk limits. It’s essential for traders to keep a close eye on funding rates and upcoming economic news throughout the summer season.
