Bitcoin wallet addresses have recently shown a decline, igniting substantial discussions within the cryptocurrency sphere. Data from Santiment reveals a drop of 672,510 Bitcoin addresses holding non-zero balances, which may suggest a dip in investor confidence. However, Santiment also highlights that such large-scale liquidations often precede a market revival, potentially increasing the chances of a rebound.
What Is Causing the Decline?
In June, Bitcoin prices soared to $70,000 but have since been on a downward trajectory. Although there has been a recent recovery to $65,000, the number of Bitcoin holders has not shown a corresponding increase. Historical data indicates that changes in the number of BTC holders typically lag behind spot market movements by several weeks, leaving room for a delayed upturn.
Current metrics indicate that the percentage of Bitcoin supply in profit has decreased to 89.43%, marking a 6.5% decline since mid-June when prices were around $70,000. This statistic reflects the overall market sentiment and the profitability of Bitcoin investments. Despite the current downturn, other indicators suggest a more positive outlook.
How Are Institutional Investors Reacting?
CryptoQuant’s founder, Ki Young Ju, pointed out that over-the-counter (OTC) markets are more active than centralized exchanges, often signaling institutional accumulation. Whale wallets containing over a thousand coins have significantly boosted their holdings this year. These large holders, including spot ETFs and custody wallets, have added 1.45 million BTC, bringing the total to 1.8 million BTC. This accumulation reflects institutional investors preparing for future gains.
Ki Young Ju also noted that weekly inflows into whale assets have surged compared to previous years. In 2021, these wallets received around 70,000 BTC throughout the year, whereas now, the weekly inflow has reached roughly 100,000 BTC. This considerable increase signifies strong demand from large-scale investors, which could support higher prices moving forward.
Key Inferences for Investors
- Large-scale liquidations could signal an impending market recovery.
- Institutional investors are increasing their BTC holdings significantly.
- Whale wallets are experiencing higher weekly inflows compared to previous years.
- The percentage of Bitcoin supply in profit has decreased, indicating current lower profitability.
- Trading volume on centralized exchanges has been declining for three consecutive months.
Conclusion
The overall trading volume on centralized crypto exchanges dropped by 21.8% in June, marking the third consecutive month of decline. This decrease in trading activity is attributed to factors such as market uncertainty and investor caution. Despite this, Bitcoin spot markets have exhibited resilience, with prices rising by 12% over the past week, currently trading around $64,657.