On-chain analysis shows the August Bitcoin (CRYPTO: BTC) rally was driven by whale interest, yet some indicators show that “hot money” is chasing Bitcoin higher.

August Rally Wasn’t Just Leverage

CryptoQuant data through Aug. 30 shows the Bitcoin rally from $63,000 to $78,000 produced a sharp divide between large and small holders.

On Sep.1, the on-chain data platform shows wallets holding 100 BTC or more added roughly 60,000 BTC. Meanwhile, wallets holding 1 to 100 BTC sold about 33,000 BTC and those holding less than 1 BTC offloaded roughly 14,000 BTC.

Large-wallet buying accelerated as Bitcoin broke higher rather than being concentrated around the lows. Bigger holders absorbed supply as smaller investors used the rally to exit.

That accumulation indicates August’s move was not simply a leverage-driven chase.

CryptoQuant states that if large wallets return their 60,000 BTC accumulation to the market while Bitcoin struggles below $80,000, the absorption thesis would weaken.

Is ‘Hot Money’ Chasing BTC?

The DeFi Report founder Michael Nadeau pointed out a separate on-chain development that warrants caution.

Bitcoin holders with a $56,000 to $66,000 cost basis became the largest ownership cohort on Aug. 18, a development the analyst had expected around a potential cycle low.

Since then nearly 2% of Bitcoin’s supply has moved out of that group and into higher cost-basis cohorts.

Nadeau wrote on Tuesday that the movement suggests some “hot money” bought near Bitcoin’s lows before passing those coins to investors chasing the latest rally.

The setup differs from Bitcoin’s 2022 bottom.

During that cycle, holders around the previous cycle’s $17,000 to $21,000 peak continued accumulating for about 60 days after becoming Bitcoin’s largest cost-basis cohort.

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