Bitcoin Long-Term Holders Continue Accumulating Amid Market Liquidity Crunch

Source: CryptoNewsNet Original Title: Bitcoin’s Persistent Long-Term Buyers Step In as Market Struggles For Liquidity Original Link:

Market Overview

Large Bitcoin holders, known as accumulator wallets, purchased 75,000 BTC between December 1 and December 10, with 40,000 BTC acquired in a single day, according to blockchain analyst DarkFrost. These wallets are defined by strict on-chain criteria: no history of selling, high purchase thresholds, multiple inflows, and no links to exchanges, miners, or smart contracts.

The Paradox: Accumulation Amid Losses

While persistent accumulation by long-term holders is supportive, it occurs against a backdrop of significant market stress. Short-term holders are experiencing substantial losses, with positions down 20-30%, according to Derek Lim, head of research at crypto market-making firm Caladan.

“Historically, this tends to be bullish when long-term holders are accumulating because it shows wealth transfer happening,” Lim told Decrypt.

Unrealized losses across the crypto ecosystem have climbed to roughly $350 billion, with Bitcoin holdings contributing almost $85 billion to that figure, according to blockchain analytics firm Glassnode.

Liquidity Concerns and Market Outlook

With multiple on-chain indicators signaling shrinking liquidity across the board, the market is likely entering a high-volatility regime in the weeks ahead. The key question is whether the Fed’s rate cut and its new $40 billion monthly Treasury bill purchase program can catalyze a sustained uptrend amid the liquidity crunch.

Lim noted that while the Treasury bill program provides technical support, the Fed’s intention was “to keep banking plumbing from seizing up, not to generate the excess liquidity crypto actually needs for genuine momentum.” He cited thin order books, year-end tax-loss harvesting, and the Fed’s measured approach as factors arguing against an explosive rally in the near term.

Cautiously Optimistic Perspectives

Other analysts see the macro shift gradually overpowering near-term headwinds. Peter Chung, head of research at Presto Research, believes “the market will increasingly reflect the impact of a looser monetary environment,” predicting a low-liquidity run-up with 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 similar tempered outlook. “In the short term, Bitcoin is unlikely to touch the active investor cost basis of $89,000,” Yoon noted, adding that while Bitcoin has historically weakened immediately after rate cuts, it tends to rally as economic momentum recovers.

Current Status

Bitcoin is up 2.4% over 24 hours and is currently trading at $92,250.