- On-chain data indicates that wallets with holdings of 10 or more Bitcoins have now equaled their January 2021 levels.
- Crypto analyst Benjamin Cowen advises caution regarding the excitement for an imminent altcoin bull run.
- Bitcoin or altcoin rally won’t commence until the Federal Reserve starts reducing interest rates.
An in-depth analysis of Bitcoin whale activity reveals that holdings are at a two-year high, but market conditions suggest a rally won’t occur until federal rate cuts resume.
Bitcoin Whale Holdings Reach Two-Year Highs
Recent data from Santiment highlights that Bitcoin whale wallets holding 10 or more BTC have reclaimed their 2021 levels. This marks a significant increase in whale activity, reminiscent of the period when the Bitcoin market cap saw an impressive rise of 226%. However, despite the accumulation by these whales, Bitcoin prices remain stagnant, currently trading around $66,000 with a market cap exceeding $1.3 trillion.
Impact of Whale Activity
Since the collapse of FTX in November 2022, there’s been a noticeable correlation between large Bitcoin wallets and Bitcoin price movements. Many in the crypto community speculate that the now-bankrupt exchange had a hand in dampening Bitcoin prices in the latter half of 2022. Despite ongoing whale activity, Bitcoin has struggled to push past the $70,000 mark, indicating a need for additional stimulus to drive prices higher.
Bitcoin Price Stagnation Amid Anticipation of Federal Rate Cuts
While Bitcoin flirts with its all-time high, most altcoins are trading below their previous peaks, creating caution among investors. According to renowned crypto analyst Benjamin Cowen, enthusiasm for an imminent altcoin bull run may be premature. He asserts that a significant crypto rally is unlikely until the Federal Reserve begins cutting interest rates again.
Historical Context and Market Performance
Cowen points out that historically, the altcoin market has shown stronger performance following Federal Reserve rate cuts. He draws parallels with the period leading up to the Fed’s rate cut in 2019, where a decline in the majority of altcoins was noted, mirroring the current trend. He suggests tracking these movements closely, as a dominant altcoin season may not materialize without a reduction in interest rates.
Conclusion
In summary, while Bitcoin whale activity is on the rise, the market remains cautious. The Bitcoin and broader crypto market are likely to remain subdued until the Federal Reserve initiates rate cuts. Investors are advised to maintain caution, particularly when considering altcoin investments during periods of high Bitcoin dominance.
