Bitcoin Pulls Back Following Whale Activity, Institutional Adoption Signals Confidence in Bitcoin’s Long-Term Outlook

Bitcoin surged past $123,000 earlier this week, reaching a new all-time high. However, on-chain analysts had already identified signs of a potential market shift. In early July, analysts flagged eight dormant Bitcoin addresses, each holding 10,000 BTC acquired in 2011 for under $3.50 per coin. All of the addresses belong to a single OG whale who has held the coins for over a decade.

The whale, estimated to hold 80,009 BTC valued at approximately $8.6 billion, began moving assets earlier this month. Six of the addresses showed activity in early July, while the remaining two were activated more recently. On July 15, on-chain analyst (@lookonchain) confirmed that 40,009 BTC had been transferred to Galaxy Digital. Subsequent blockchain data showed that Galaxy Digital has since deposited 6,000 BTC directly into exchanges Bybit and Bitget.

Bitcoin fell nearly 5 percent in the past 24 hours and is currently trading at $116,760. According to Coinglass, $394.35 million in positions were liquidated over the last four hours, including $159.7 million in Bitcoin long positions. Despite the correction, the Crypto Fear and Greed Index remains at 70, indicating that investor sentiment is still in the "greed" zone.

As of now, the whale retains 40,000 BTC with a market value of around $4.67 billion.

Despite Whale Selling, Institutional Interest in Bitcoin Remains Robust

A recent sell-off by a long-dormant Bitcoin whale has sparked renewed concerns about market volatility. Bitcoin declined by approximately 5 percent, and the broader market response remained measured. This response contrasts with the German government’s sale of 50,000 BTC in July 2024, which triggered price swings of up to 20 percent.

The transferred BTC, sent to Galaxy Digital, likely involved an over-the-counter (OTC) transaction and is widely believed to have been acquired by institutional buyers. Unlike previous market cycles in 2024, Bitcoin is increasingly being held by institutional investors as part of long-term strategic allocations. In an interview with The Block, Wintermute reported that institutions now allocate 67 percent of their crypto portfolios to major assets such as Bitcoin and Ethereum. The firm also observed a 412 percent year-over-year increase in over-the-counter options volume during the first half of 2025. This growth reflects a rising focus among institutions on capital efficiency, yield generation, and risk management.

Wintermute further noted a widening gap in investor behavior. While institutional participants are approaching crypto as a macroeconomic asset class, retail traders continue to seek high-risk opportunities and emerging innovations. “This divergence is not a temporary phenomenon. It is evidence of a more mature, sophisticated, and specialized crypto market,” said Evgeny Gaevoy, founder and chief executive officer of Wintermute.

Reinforcing this trend, The Kobeissi Letter reported that conservative funds in the United States have begun allocating capital to Bitcoin. With total U.S. institutional assets under management estimated at $31 trillion, even a 1 percent allocation could result in inflows exceeding $300 billion. On a global scale, that figure could surpass $1 trillion.

The report also highlighted Bitcoin’s long-term performance, noting that while a 90 percent return in a single year may appear exceptional, the asset has delivered a 90 percent compound annual growth rate over the past 13 years. This track record is increasingly being recognized as a compelling case for institutional investment.

Bitcoin Rally Fuels Altcoin Rotation as Markets Eye Fed Rate Decision

Bitcoin's surge to a new all-time high has sparked heightened optimism across the crypto market, with growing expectations of an impending "altcoin season." According to HTX Research analyst Chloe, capital is beginning to rotate out of Bitcoin and into higher beta assets such as Ethereum, Solana, and decentralized finance (DeFi) tokens. This shift reflects increased risk appetite among investors.

Activity in the options market supports this bullish sentiment. The put-call skew has increased from 2 percent to approximately 5 percent, while implied volatility remains near recent lows. Open interest and trading volume have also risen, indicating that institutional investors are gradually building long positions in anticipation of continued upward momentum.

Meanwhile, macroeconomic developments remain a key focus for markets. Data from the CME FedWatch shows a 59 percent probability of a Federal Reserve rate cut in September. Investors are closely watching the upcoming release of June’s Consumer Price Index (CPI) today, which could significantly influence rate expectations.

The CPI report may also shed light on the longer-term inflation outlook, particularly in the context of tariffs implemented during the Trump administration. Federal Reserve Chair Jerome Powell has emphasized that more time is needed to assess the impact of these trade policies. He noted that this summer will be critical in evaluating how inflation responds to tariffs affecting major industries and key trading partners.

Whale activity, rising institutional demand, and macro signals are now converging. As markets await the Fed's next move, Bitcoin’s direction will hinge on both risk appetite and policy clarity.