This Declining Bitcoin Metric Could Actually Signal Bullish Future for BTC Price: Santiment
Bitcoin briefly touched $66,000 as it continued its recovery after a rough couple of weeks. Despite this bounce-off, data reveals that certain investors are still reluctant to come back as they seem to believe “the March ATH was as good as it’s going to get in 2024.”
Interestingly, Santiment suggests the potential for a rebound soon.
Aggressive Bitcoin Holder Drop But Rebound on Horizon?
According to the latest analysis by on-chain analytic platform Santiment, there has been a significant drop in the number of Bitcoin holders, with addresses containing a balance of more than zero shrunk by 672,510 over the past month. This trend suggests that traders are losing confidence, seemingly convinced that the all-time high established in March 2024 represents the peak for the year.
This mass liquidation of Bitcoin holdings often occurs when investors seek to cut losses or take profits, indicating a bearish sentiment in the market. However, Santiment explained that such mass sell-offs could, in fact, signal a potential turnaround.
Historically, when the market experiences massive liquidations, it often sets the stage for a potential rebound, as oversold conditions create opportunities for buying at lower prices, thereby increasing the probability of a recovery in the value of the crypto asset.
Bitcoin OTC Markets Overwhelm CEX
CryptoQuant founder Ki Young Ju recently highlighted the dominance of over-the-counter (OTC) markets over centralized exchanges (CEX). Whale wallets, including those associated with spot ETFs and custodial services, have accumulated 1.45 million BTC this year, bringing their total holdings to 1.8 million BTC.
This starkly contrasts with the inflows seen in 2021, where approximately 70,000 BTC were added throughout the entire year. The exec pointed out that the influx has surged to a whopping 100,000 BTC per week. This dramatic increase shows the growing influence of large-scale whale entities in the Bitcoin market.
“This is not internal shuffling from existing custodial wallets. The balance of old whale wallets(>155d) hasn’t decreased, while the balance of new whale wallets(<155d) has increased.”
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