Despite Bitcoin’s current status below $100,000, on-chain data indicates a potential upward move. According to CryptoQuant, an on-chain analytics platform, there has been a significant increase in the ‘Permanent Holder Demand’ of Bitcoin. This demand increase correlates with Bitcoin’s price surge from nearly $67,500 in November 2024 to its record highs in early 2025.

Data from CryptoQuant shows that accumulator addresses, mainly held by long-term investors who seldom sell, have significantly increased their Bitcoin holdings. Historically, a spike in permanent holder demand has usually been followed by a nearly equal decline, suggesting that many of these ‘strong hands’ would become sellers within a month of accumulating Bitcoin. This trend was particularly noticeable during previous bull runs, where aggressive buying was later replaced by distribution.

The unique aspect of the current uptrend is the sustained demand from accumulator addresses, which has not returned to pre-Trump levels even after a recent decline from peak accumulation levels. Instead, demand has bounced back during the early February correction, indicating that long-term holders are sticking to their Bitcoin investments, with fewer taking profit compared to earlier cycles.

Trump’s potential strategic Bitcoin reserve in the US and the growth of Bitcoin among institutional entities (ETFs, government, publicly traded companies, funds, etc.) are contributing significantly to the continued upward momentum. Bitcoin is also showing signs of a potential breakout, with a technical analysis indicating a possible jump to $116,000.

Moreover, an unprecedented Doji candle formation on the daily Bitcoin chart signals potential market volatility, akin to the trends post the FTX crash in November 2022. Past patterns suggest that Bitcoin could be set for another explosive price surge. Grayscale’s research head, Zach Pandl, also predicts that Bitcoin could reach new all-time highs in Q1 2025, aided by Trump’s policy tailwinds and stable equity markets.

However, the $80,000 price point remains a popular short-term target among analysts. Investment research firm Bravo Research further notes that such a drop would provide traders with “buy the dip” opportunities.

Readers are advised to conduct their own research as every investment and trading move involves risk. This article does not provide investment advice or recommendations.

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