Bitcoin Whales Bought the Dip - Now They’re Doubling Down on the Rally

Earlier this week, Bitcoin briefly tapped $87,000 for the first time since January before retracing and stabilizing near $84,000.

But the “smart money” tier has continued to build its positions.

Heavy Accumulation

According to Santiment, Bitcoin’s whale wallets are stepping up accumulation. Wallets holding between 100 and 1,000 BTC have added 113,950 units since July 15. Their total holdings have increased 2.22% to around 5.24 million. Santiment has tracked this wallet group for five years and found that its activity has often aligned closely with the broader crypto market. In the past, periods of heavy accumulation have appeared before or during stronger Bitcoin price moves.

This trend has continued as the crypto asset climbed sharply from mid-August. The data not only indicates that large holders have continued buying during the rally but also shows that the recent surge is not being driven only by retail traders.

The recovery and the subsequent rise in optimism come as Bitcoin cleared an important level after moving back above its 365-day moving average, which was around $80,500. The last time it made a similar move was back in March 2023, when the price later pushed much higher. The latest break could be a sign that the longer-term trend is turning positive.

Bitcoin also climbed through a heavy supply zone between $76,000 and $81,000. The next area to watch is $88,000 to $90,000. A large amount of BTC is concentrated there, which makes it the next major test for the rally.

Still, the current cycle may not produce the kind of extreme fluctuations Bitcoin became known for previously. Ki Young Ju expects the current cycle to bring a 3-to-5x rally, rather than another huge 10x surge. CryptoQuant founder recently said that he sees a softer bear market ahead while adding that the growing market and rising institutional interest are reducing extreme price swings.

Behind BTC’s Rally

But not everyone sees the latest move as a broad return of risk appetite. While speaking to CryptoPotato, Trace Finance co-founder Bernardo Brites said that the speed of the recovery was partly driven by a short squeeze. The bigger question, he said, is where the new money is coming from.

It is important to note that US spot Bitcoin ETF inflows attracted almost $1 billion on Monday. Smaller inflows were also recorded in the two trading sessions that followed. This suggests that much of the fresh capital is entering through traditional financial markets rather than directly through crypto.

“I wouldn’t read this as a broad return of risk appetite. Bitcoin rallying through a rate hike, $100 oil, and elevated yields suggests some investors are treating it as a hedge against inflation, fiscal and geopolitical risk rather than as a bet on easy money.”

For Brites, the next test is whether ETF inflows continue. If demand stays strong and stablecoin supply starts growing again, the exec anticipates a stronger base for the rally.