Why Is Bitcoin Falling While Buyers Keep Buying?

Bitcoin rallied over 50% from its lows before pulling back over the past few weeks. Meanwhile, billions of dollars have continued flowing into Bitcoin ETFs. So if buyers are accumulating so much Bitcoin, why isn’t price moving higher?

 

Behind the pullback:

• Over 25% of IBIT’s net inflows since the bottom arrived after the local high.
• Addresses with more than 10 BTC have fallen by around 8,000 from their 2023 peak.
• Drawdowns exceeding 20% were common in previous bull markets; this recovery hasn’t yet seen 10%.

 

Buyers Are Still Here

ETF Cumulative Flows show IBIT attracting net inflows equivalent to ~76,000 BTC since the June low, worth over $6 billion at current prices. Of that, just over 19,000 BTC arrived after the local high. That’s over 25% of the total during a period when price has been struggling.

 

Figure 1: Over 25% of IBIT’s net inflows since the bottom arrive after the local high.

 

The other side of that buying is existing holders taking profits. Long Term Holder Supply has been declining as older coins move, and my read is that selling pressure has outweighed the new demand. Strong ETF inflows can absorb a lot of supply without immediately pushing price higher.

 

Coins Changing Hands

That distribution is part of a longer transition. Addresses with a balance of over 10 BTC have fallen by around 8,000 from their 2023 peak, leaving around 150,000. Bitcoin has risen substantially over that period, even as the number of larger addresses has declined.

 

Figure 2: Addresses with Balance > 10 BTC fall by around 8,000 from their 2023 peak.  

 

View Live Chart

 

An address isn’t the same as an individual owner, especially when custodians hold coins for many investors. But I think the wider shift from early holders towards ETF investors and businesses is helping Bitcoin mature. Having fewer early adopters able to move the market with a single large sale would make price action more sustainable.

 

A Normal Pullback

Previous Bitcoin bull markets regularly experienced drawdowns exceeding 20%. In this recovery, we’ve rallied over 50% and haven’t yet experienced even a 10% pullback. Against those earlier cycles, the recent decline barely registers.

 

Figure 3: Bitcoin’s current bull market drawdown remains below 10%.

 

We can’t rally vertically non-stop, as much as we’d like that to happen! Older holders taking profits along the way is normal during bull markets. The fact that buyers are still absorbing coins through this weakness is encouraging.

 

Still Constructive

I see this as a healthy pause within the bull market. The buying hasn’t disappeared, and the correction remains small compared with previous cycles. I think this transfer of coins to new investors is setting Bitcoin up for a healthier, more sustainable period of price action.

 

I’ll be speaking at Bitcoin Amsterdam next week. If you’d like a ticket, send me a message on X and I’ll sort you out.

 

Subscribe to the Look Into Bitcoin Substack for more research throughout the week.

 

For more on this, watch our recent YouTube video here:

They’re Buying Billions Of Bitcoin, Why Is the Price Falling

 

Have a lovely week, and I’ll see you in the next one!

 

@MattCrosbyPro

Research Director