The current Bitcoin cycle may be the “most challenging” yet if the decline in this on-chain metric is anything to go by.
The total amount held by the 1k-10k BTC value band has dropped sharply recently
As noted by an analyst in a CryptoQuant after, the latest withdrawal held by the 1k-10k BTC value band is the most drastic in crypto history. The relevant indicator here is the “UTXO Value Bands”, which tell us the total number of coins each value band has in the market.
UTXOs are divided into these “value bands” or groups based on their current value. For example, the 100-1k BTC value band includes all UTXOs with between 100 and 1,000 coins. Here the relevant UTXO value band is the 1k-10k BTC range, a historically important cohort as usually only the whales have portfolios with such large UTXO amounts.
Now the chart below shows the trend in total holdings of this asset class over the past five years:
Looks like the value of the metric has rapidly declined in recent months | Source: CryptoQuant
The chart shows that the total number of coins of this Bitcoin UTXO value band has fallen sharply this year. In total, the withdrawal amounted to 453,205.04 BTC dumped by this cohort since peaking in June 2022.
In comparison, in the 2018/19 bear market, the 1k-10k BTC value band saw a total withdrawal of 324,868.65 BTC from the high. During the COVID black swan crash of 2020the group also distributed a significant amount and lost 186,928.48 of its holdings.
And in the bull run during the first half of last year, these whales reduced their holdings by 407,457.14 BTC between the peak in February and the bottom in July. The latest drop in the metric’s value is the sharpest Bitcoin has seen to date. Because of this fact, the quant exclaims that the current cycle is the “most challenging” in the asset’s history to date.
An interesting pattern can also be seen in the graph; whenever the 1k-10k BTC finishes distributing and starts accumulating again, Bitcoin has felt a bullish effect. “In general, the market can only recover if this cohort is confident enough to start accumulating again,” the analyst explains. “And at this point, we’re still not getting positive signals from this cohort.”
BTC price
At the moment of writing, The price of Bitcoin floating around $16,600, down 1% over the past week.
BTC seems to have gone down during the past day | Source: BTCUSD on TradingView
Featured image of mana5280 on Unsplash.com, charts from TradingView.com, CryptoQuant.com