Bitcoin Nears All-Time High: On-Chain Active Addresses and Whale Holdings Reveal the Driving Forces

Bitcoin Nears All-Time High: On-Chain Data Reveals the Driving Forces

Bitcoin has recently climbed steadily, approaching its previous all-time high. Market sentiment is elevated, with investors closely watching the sustainability of this rally. Compared to past bull markets, this cycle exhibits distinct on-chain characteristics that offer key insights into its underlying momentum.

On-Chain Active Addresses: New Participants Enter, but with a Different Structure

According to data from on-chain analytics platform Glassnode, the number of active addresses on the Bitcoin network has risen notably recently, indicating an acceleration of new user adoption. However, compared to the early stages of the 2017 and 2021 bull runs, the growth slope of active addresses is relatively gentler. Analysts suggest this may imply the market is primarily driven by long-term holders and institutional investors, rather than retail FOMO. The composition of active addresses has also shifted: the share of small-value transfer addresses has declined, while the share of large-value transfer addresses (often associated with exchanges or OTC trading) has increased, reflecting an institutional trend in capital flows.

Whale Holdings: Accumulation and Distribution Coexist

The behavior of whales—addresses holding over 1,000 BTC—has long been a market bellwether. According to CoinMetrics data, since the start of 2024, the Bitcoin balance of whale addresses has shown a net inflow overall, with whales often adding positions during price pullbacks. This contrasts sharply with the massive distribution by whales in the later stages of the 2021 bull run. However, some "super whales" holding over 10,000 BTC have recently shown signs of minor selling, possibly taking partial profits at elevated levels. Overall, the holding confidence among the whale cohort remains strong, providing downside support for prices.

Exchange Balances: Supply Squeeze Signal Persists

Another key on-chain metric is the Bitcoin balance on exchanges. According to CryptoQuant, the amount of Bitcoin in exchange wallets has fallen to its lowest level in nearly five years. This indicates that more investors are withdrawing Bitcoin from exchanges to self-custody wallets or staking, reducing the circulating supply available for trading. This "supply squeeze" phenomenon has occurred in past bull markets, but its magnitude is more pronounced this cycle. Analysts attribute this to the launch of spot ETFs and long-term institutional allocation demand—institutions typically do not trade frequently after buying, thus locking up a significant amount of coins.

Similarities and Differences with Past Bull Runs: Institutional Dominance, Lower Volatility

Unlike the 2017 ICO bubble-driven retail bull market, the core driver of this rally is institutional capital flowing through regulated channels. Since the approval of U.S. spot Bitcoin ETFs in early 2024, they have consistently attracted substantial inflows; according to Bloomberg data, cumulative net inflows into ETFs have exceeded tens of billions of dollars. This has led to significantly lower volatility compared to past bull runs—daily price swings of more than 10% are less frequent, replaced by a more gradual step-like ascent. Additionally, on-chain data shows that the proportion of coins held by long-term holders (addresses holding for more than 155 days) has reached an all-time high, suggesting investors are more inclined to hold rather than trade short-term.

However, similar to the 2021 bull run, leverage levels remain a concern. According to Bybit data, the funding rate for perpetual swaps on exchanges recently rose above 0.05%, indicating overheated long sentiment that could trigger a short-term correction. Nevertheless, the overall on-chain fundamentals appear healthier than in previous cycles.

Risk Warning

The above content is for reference only and does not constitute investment advice. The cryptocurrency market is highly volatile, and investors should make decisions carefully based on their own risk tolerance. While on-chain data can provide insights, it cannot predict short-term price movements, and past performance is not indicative of future results.