The Bitcoin Era with Low Trading Rates Is Coming Soon

On the surface, this year Bitcoin seems to be experiencing continuous volatility. But if you extend the timeframe for observation, you’ll see that the price hasn’t actually moved much. From the beginning of the year until now, BTC has even decreased by about 5%, underperforming many other major assets. Notably, the market no longer experiences sharp crashes like before, but instead sees slow, gradual declines step by step. This change is not accidental but stems from who is actually dominating the market. From the High-End Trading Market to the Long-Term Holding Market Previously, Bitcoin was mainly driven by retail investors and short-term trading flows, with very high buy-sell ratios. But now, the central role is gradually shifting to large institutions—those with low trading activity, infrequent buying and selling, and a focus on long-term holding. It sounds more “stable,” but the downside is: when buying and selling pressure is no longer lively, the market’s ability to absorb selling pressure weakens. To match trades, the market is forced to find lower prices. As a result, Bitcoin’s price doesn’t fall sharply but “slides down gradually.” Holding Structure Is Changing In terms of the number of participants, retail investors still make up the absolute majority. About 98% of holders don’t even own 1 BTC. However, from a cash flow perspective, the influence of institutions and ETFs is increasingly significant—and their trend is very clear: long-term accumulation. In the first half of the year, the market showed a clear polarization: Mega-large institutions continuously buy in, helping the market maintain a relatively stable state. The medium-sized institutions (hold 100–1000 BTC) also steadily accumulate. Conversely, small whales and retail investors keep selling. As prices weaken in the second half of the year, retail investor sentiment drops sharply, many leaving the market, causing liquidity to decline even further. Bitcoin Leaving Exchanges – An Important Signal Being Ignored A key change is: the amount of BTC on exchanges continuously decreases. Coins are withdrawn to personal wallets or stored long-term, indicating that buyers are not just trading for quick profits but intend to hold long-term. This is extremely important because it means: the amount of BTC available for immediate trading on the market is decreasing. When comparing this with price volatility, we see that almost every decline is accompanied by a reduction in circulating supply. This indicates that someone is selling, but very disciplined: exerting price pressure while gradually exiting holdings. During downturns, retail investors lack the capacity to absorb this, leaving only medium-sized institutions buying at different price levels—and they buy to diversify assets, not to push prices up. The result is: one side sells steadily, the other buys slowly, and prices keep searching for a “sellable” lower level. What Is the Nature of This Cycle? The essence of the current cycle is the transfer of BTC from high-frequency traders to long-term holders, low-frequency traders. When the overall market trading activity decreases, Bitcoin no longer “runs fast” as before, and prices are less likely to see sharp rebounds. When Can Bitcoin Truly Rise Again? The answer is simple: Long-term holders completely stop selling—that is, the transfer of supply has ended. The flow of funds with an average-to-high trading rate returns, not driven by the fleeting emotions of retail investors, but by a new capital cycle ready for active trading. When trading activity increases again, Bitcoin’s price will truly have the momentum to enter a new phase. For now, the market seems more like preparing the foundation for that moment rather than starting a strong rally immediately.