Bitcoin (BTC) Plunges to $90,600 Amid Declining Whale Activity: What’s Next?

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To start the week, Bitcoin experienced a substantial drop, dipping below $90,600, which was its lowest point since November. In just one day, the cryptocurrency fell by nearly 4%, adding to its total monthly losses of 11%. This downturn indicates a more quiet phase for Bitcoin and the overall market.

During this time, the whale activity also appears to have taken a tumble.

Subdued Bitcoin Market Activity

In a recent post, crypto expert Ali Martinez pointed out a significant decrease in big Bitcoin transactions, implying less action from major investors or “whales.” According to his tweet, the count of large Bitcoin transactions has fallen by approximately 51.64% over the last month, going from 33,450 down to 16,180.

A significant decrease in whale involvement usually hints at a cooling market, since these major players are frequently regarded as influential factors shaping the fluctuations in Bitcoin pricing.

Furthermore, there’s been a substantial drop in Bitcoin network usage, as the number of active addresses has dipped to 667,100 – a figure last seen in November 2024. This decrease suggests a marked reduction in user interaction and transactional activity throughout the network, potentially indicating waning enthusiasm from both individual and institutional investors.

Despite this, many argue that Bitcoin’s January slump is not unusual.

January Declines Expected in Post-Halving Years

As a researcher studying the crypto market, I’ve drawn attention to a pattern that Axel Bitblaze, the crypto analyst, highlighted: the current downtrend in cryptocurrencies this month is not unprecedented, especially in years following halvings. In his tweet, Bitblaze referenced similar occurrences in January 2017, 2021, and now 2025, where Bitcoin underwent substantial drops before rallying strongly.

For example, Bitcoin fell from $1,185 to $800 back in January 2017, and again dropped from $42,000 to $28,000 in January 2021. This year’s decrease from $103,000 follows a similar pattern as these previous instances.

Bitblaze touched upon the effects that Bitcoin’s predominance might have – this refers to the proportion of Bitcoin’s total market value compared to all cryptocurrencies. This ratio tends to reach its highest point about three years following a halving event. Lately, it has dropped from 62% to 54%, which coincides with altcoins experiencing a surge in value as a result.

Moving ahead, the analyst underscored liquidity as a vital aspect in the crypto market, suggesting possible economic measures like reduced interest rates or additional capital infusion might create a favorable environment for Bitcoin, potentially boosting its value.

In simpler terms, when we look at data like the Spent Output Profit Ratio (SOPR), it often indicates potential buying opportunities during tough market phases. This is consistent with past trends that have typically been followed by substantial price increases.

In a similar vein, Crypto Rover, a well-known YouTube personality and analyst, stated that for the past year, the primary cryptocurrency has consistently dropped during the first part of each month. He characterized this ongoing drop as “modest,” but predicted that a recovery, or “bounce,” in the second half of the month will definitely occur.

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2025-01-13 16:58