Bitcoin’s persistent long-term buyers are stepping in as the market struggles for liquidity

Bullish Bitcoin portfolios continue to buy up the digital asset even as unrealized losses mount and liquidity remains tight across the sector.

Large holders – called accumulator portfolios – bought 75,000 BTC between December 1 and 10, including 40,000 BTC in one day, CryptoQuant analyst DarkFrost wrote on Thursday tweet.

Strict on-chain criteria define that the wallets have no sales history, meet a high purchase threshold, exhibit multiple inflows, and are not linked to exchanges, miners, or smart contracts.

While the continued accumulation is supportive, it is also taking place against a backdrop of significant market stress.

“Short-term holders’ losses continue to pile up; they are 20-30% underwater,” Derek Lim, head of research at crypto market maker Caladan, told me. Declutter. “Historically, this tends to be bullish when long-term holdings accumulate because it shows that wealth transfer is happening.”

It extends well beyond short-term holders, as unrealized losses in the crypto ecosystem have risen to around $350 billion, according to Glassnode. Unrealized losses on Bitcoin holdings contributed nearly $85 billion to that figure.

“With multiple on-chain indicators pointing to declining liquidity across the board, the market is likely to enter a regime of high volatility in the coming weeks,” blockchain analytics firm Glassnode said on Thursday. tweet.

The question is whether the Fed’s rate cut and new $40 billion monthly bond purchasing program can catalyze a sustained upward trend amid the liquidity crisis.

Although the answer wasn’t a resounding yes, experts who spoke said Declutter took a cautiously optimistic stance.

“The $40 billion monthly T-bill program provides technical support,” Lim noted. However, he clarified that the Fed’s intention was “to prevent the banking system from seizing up, and not to generate the excess liquidity that crypto actually needs for real momentum.”

“The holiday liquidity problem is also a real problem,” he added, citing thin order books, year-end tax loss harvesting and the Fed’s measured approach as factors arguing against an “explosive illiquid run-up at this point.”

Other analysts believe the macroeconomic shift will gradually overwhelm short-term headwinds.

“The market will increasingly reflect the impact of a looser monetary environment,” said Peter Chung, head of research at Presto Research. Declutter. “I’m betting on a run-up of low liquidity,” he added, predicting there would be “more buying interest than selling pressure” due to cumulative rate cuts in 2025 and the Fed’s new liquidity program.

Ryan Yoon, Senior Research Analyst at Tiger Research, offered a similarly measured view.

“In the near term, Bitcoin is unlikely to reach the active investor cost basis of $89,000,” Yoon told us. Declutternoting that while Bitcoin has historically weakened immediately after rate cuts, it tends to recover as economic momentum recovers.

Bitcoin is up 2.4% in 24 hours and is currently trading at $92,250, according to CoinGecko data.