Why Is Bitcoin Price Down Today Despite Massive Whale Accumulation?

Amid much volatility in the marker, Bitcoin price declined over $6,000 earlier today, from its recent highest mark, despite evidence of whale accumulation. As market changes reflect pullbacks in cryptocurrencies, a key concern is why the prices were moving against the on-chain data.

M2 Model Signals Weakness Ahead of Bitcoin Price Drop

Notably, recent observations from the M2 money supply model have drawn attention across crypto analyst circles. M2, which tracks the broad supply of money in circulation, including cash, savings, and time deposits, has frequently acted as a forward indicator for Bitcoin price direction.

Analyst, Crypto Seth noted that the peak of M2 appeared before Bitcoin dropped from $112,000 to $105,000. Historical evidence revealed that a slowing of growth in the money supply occurs before Bitcoin price goes down.

Since the decline is happening, macro liquidity appears to be having a larger impact on Bitcoin price compared to quick inbound purchases.

Tariff News Sparks Market Caution

More so, geopolitical events have added further pressure. U.S. trade policy tensions resurfaced this week after news broke of tariff-related decisions being challenged in court.

Analysts noted that a U.S. federal court blocked most of former President Trump’s proposed tariffs. The resulting uncertainty has increased caution among crypto traders.

Consequently, several analysts in the industry expect that the court’s ruling could have a strong impact on international trade. The news led to the sharp selling of Bitcoin, which is usually affected by macroeconomic conditions.

Additionally, traders may be adjusting risk exposure in response to evolving trade policies, leading to increased outflows and temporary sell-offs.

Moreover, China has reportedly reimposed a ban on the ownership of Bitcoin and other cryptocurrencies, renewing its long-standing restrictions on digital assets.

The announcement sparked sharp market reactions, contributing to Bitcoin’s price decline from $112,000 to below $106,000.

Fear of stronger regulation caused traders to act cautiously. Announcements from China in the past have usually caused short-term price fluctuations, targeting retail traders and Asian stock markets.

Options Expiry and PCE Inflation Data Release

Meanwhile, recent analysis suggested that Bitcoin price slump is mostly due to the upcoming expiry of $7.7 billion in BTC options on Deribit. A near-even put-call ratio and max payout of $100,000 are causing more investors to sell.

More market activity and rising demand for puts indicate that traders are becoming more cautious before the expiry of options and important economic events.

Moreover, Bitcoin price decline may also be due to investors becoming more cautious before the PCE inflation release in the U.S. The PCE reading, favored by the Federal Reserve, may affect decisions on interest rates.

With core inflation continuing to be above its goal and no clear indications of future rate cuts, investors are less willing to participate in risky assets.

Hesitation among investors about inflation has made sellers more active in the Bitcoin market. The Fed is yet to reveal its next move on interest rates.

Whale Activity Surges but Bitcoin Price Lags Today

Meanwhile, analysts monitoring on-chain data noticed that major Bitcoin holders have been stocking up on the top crypto lately. Over 240,000 BTC have entered wallets holding over 100 BTC since late 2024.

This trend has intensified recently, with 20,000 BTC acquired within just 48 hours. The number of addresses holding 100+ BTC is also at an all-time high.

Surprisingly, the prices did not react as expected. Analysts suggest that this happens because whale purchases take time to reflect in the whole market.

Over the years, whale accumulation has often been seen before large upturns, yet not every purchase directly leads to a quick price change. Often, these are strategies for future positioning, not just for quick market gains.

At the time of writing, Bitcoin price today traded at $104,918, down 3.72% in 24 hours, with strong sell pressure after rejection at $108.5K and support forming near the $105K level.

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