The Bitcoin market is experiencing its third major profit-taking wave of the current bull cycle, a move primarily driven by “new whales”—a class of investors who have recently accumulated significant BTC holdings. This latest sell-off was initiated as Bitcoin crossed the $120,000 mark, according to on-chain analytics firm CryptoQuant.
In late July, realized profits from Bitcoin transactions surged to between $6 billion and $8 billion, levels that coincided with previous local tops in March and December 2024. In crypto, whales are entities holding at least 1,000 BTC. While traditional whales are often early adopters, 'new whales' have amassed their BTC wealth more recently, increasing the likelihood that they include institutional investors or corporations.
This profit-taking cycle follows two previous waves. The first wave occurred in March 2024, triggered by the approval of U.S. spot Bitcoin ETFs. A second wave followed from December 2024 to February 2025 as Bitcoin rallied past $100,000. Both of these periods were followed by cooling-off phases in the market.
Despite the selling from new whales, the market has shown remarkable resilience. Demand from fresh capital appears to be absorbing the sell-side pressure, maintaining a bullish structure. This balance between older investors locking in gains and new capital entering the market suggests underlying strength. Furthermore, it's not just new whales who are selling. A long-dormant entity that accumulated 80,000 BTC during the Satoshi Nakamoto era recently realized $9.7 billion in profits. Even after this massive sale, the market quickly recovered from a brief 4% dip, indicating strong demand.
On-chain indicators like the Spent Output Profit Ratio (SOPR) for short-term holders confirm the trend. The SOPR for short-term holders climbed above 1.05, indicating that coins were being sold at a 5% profit. These profit-taking periods are often seen as healthy distribution phases in a bull cycle, allowing the market to consolidate before the next leg up. While whale activity can lead to short-term volatility, the market's ability to absorb these sales suggests a more mature and resilient market compared to previous cycles.