Bitcoin on-chain metrics indicate potential further declines, according to a new CryptoQuant report. Despite these signals, Bitcoin whales are accumulating at the fastest rate in over a year. The profit and loss (P&L) index is currently around its 365-day moving average (MA). The on-chain data provider warns that if this index drops below its 365-day MA, Bitcoin could face a significant correction, akin to those seen during previous downturns.

"A crossover to the downside has been associated with major corrections (May-July 2021) or the start of a bear market (November-December 2021)," the report states, highlighting historical patterns.

CryptoQuant’s bull-bear market cycle indicator also approaches a critical threshold. Should it dip below the neutral line, it could signal the onset of a bear market, similar to previous cycles observed in March 2020, May 2021, and November 2021. This potential shift could herald further price declines. Adding to the uncertainty, the growth of Tether’s (USDT) market cap has stalled. CryptoQuant notes that historical Bitcoin recoveries often coincide with increased stablecoin liquidity, particularly from USDT minting.

Despite these bearish signals, Bitcoin whales have been aggressively accumulating during the recent price dip. Large holders increased their Bitcoin holdings by 6.3% over the past month, the fastest accumulation rate since April 2023. This trend indicates rising demand for Bitcoin at lower price levels, which is also reflected by increased inflows into US spot Bitcoin exchange-traded funds (ETFs). The ETFs saw $143.1 million in inflows on July 5, despite a drop to four-month lows. This was followed by $294.9 million and $216.4 million in net inflows on July 8 and July 9, respectively.