Bitcoin Bottom Signal Appears as Whales Buy, ETFs Net $526M

Bitcoin Shows Signs of Bottoming as Large Holders Re-enter Market

Bitcoin may be approaching a market bottom, according to an analyst from CryptoQuant, as significant holders resume accumulation and spot Bitcoin Exchange-Traded Funds (ETFs) see substantial inflows. However, persistent weakness in spot demand and price resistance levels cast a shadow over the immediate recovery prospects.

On-chain data indicates a shift in behavior among large Bitcoin holders, those possessing between 1,000 and 10,000 BTC. These entities have transitioned from net sellers to net buyers, with their 60-day accumulation moving from a deficit of 62,600 BTC to a surplus of 5,230 BTC. This suggests that major players are beginning to rebuild their positions.

Further bolstering this sentiment, Binance’s USDT reserves have surged from approximately $790 million to $1.76 billion, signaling a potential increase in available capital for cryptocurrency purchases.

Despite this accumulation by large holders, demand in the spot market remains subdued. The Coinbase Premium Index, currently around -0.1416%, points to weaker buying pressure from U.S. investors. Additionally, weekly exchange flows have registered a net inflow of 8,428 BTC, which could indicate that more Bitcoin is moving onto exchanges, potentially facing selling pressure.

The Short-Term Holder Spent Output Profit Ratio (STH-SOPR) hovers near 0.9982, suggesting that short-term holders are, on average, still selling at a slight loss. XWIN Finance, a verified author on CryptoQuant, noted that while the market might be transitioning from a phase of fewer sellers towards a potential bottom, a sustained rally will necessitate stronger spot demand.

Institutional Interest Bolsters Bitcoin ETFs

While spot demand falters, institutional interest has shown resilience. U.S. spot Bitcoin ETFs recorded $526.7 million in net inflows on October 19, marking their largest daily total since September 22, when inflows reached $714.75 million.

BlackRock’s iShares Bitcoin Trust (IBIT) was a significant driver, attracting $665.2 million. This inflow helped offset outflows from other ETFs, including $83.6 million from Fidelity’s FBTC and $54.9 million from Grayscale’s GBTC. These inflows are particularly encouraging following a week where Bitcoin ETFs experienced $409.2 million in net outflows. However, a single strong day of inflows does not necessarily confirm a lasting reversal.

Price Action Faces Resistance and Support Levels

In terms of price action, Bitcoin has slipped below the $81,500 mark, a level that now presents resistance. This decline leaves $79,500 as the next key support level. Repeated rejections near $83,500 have weakened the short-term price structure.

Bitcoin has now lost the $81,500 support level. Following multiple failed attempts to push higher, BTC is breaking down from its recent trading range. The next significant level to watch is $79,500. Without a reclaim of $81,500, there is a notable risk of further downward movement.

Buyers will need to drive Bitcoin back above $81,500 to improve the short-term outlook. If the price remains below this level, a retest of the $79,500 support becomes increasingly probable.

For the time being, whale accumulation and ETF inflows provide some signs of support. However, a sustained recovery will ultimately depend on stronger spot demand.