Bitcoin’s largest holders, often called whales, have significantly slowed their accumulation, with annual balance growth turning negative for accounts holding between 1,000 and 10,000 BTC. This marks the fastest contraction in these whale accounts this year, signaling a shift away from previous buying trends that helped support Bitcoin’s price.

Meanwhile, Bitcoin “dolphins,” investors holding between 100 and 1,000 BTC—many of which include exchange-traded funds and corporate treasuries—still show annual growth but at a sharply reduced pace. Monthly balance growth across both whales and dolphins has hovered near zero since early this year, reflecting a distribution phase similar to patterns observed during the 2022 bear market.

This trend is concerning because whales and dolphins historically form the backbone of Bitcoin’s structural demand. CryptoQuant, a blockchain analytics firm, notes that successive lower highs in these cohorts’ balances since late last year have often preceded extended periods of price weakness in the past.

Adding to the bearish outlook, CryptoQuant reports that long-term holder supply has reached an all-time high, crossing 15.8 million BTC. This rise, however, is interpreted as a negative signal, pointing to fewer new buyers entering the market rather than increased confidence.

Further analysis from HashKey Group’s researcher Tim Sun highlights that nearly half of the Bitcoin supply now sits in unrealized loss—levels unseen since the 2022 bear market bottom. This persistent unrealized loss suggests that a significant portion of investors are holding positions bought at higher prices, which may pressure selling if prices do not recover.

Sun estimates that Bitcoin’s absolute bottom could range between $40,000 and $45,000, based on on-chain realized prices. Yet, under stable geopolitical conditions and a pause or easing in Fed rate hikes, a more optimistic bottom around $55,000 to $60,000 might form.

Market analyst Darkfrost comments on the current price action as a challenging terrain for investors, where optimism and pessimism swing sharply depending on Bitcoin’s position within its range-bound trading. At current prices near $73,700, roughly 40% of Bitcoin’s circulating supply is underwater, maintaining pressure on the market sentiment.