Addresses Holding Bitcoin Continue to Decline, Indicating Potential Rebound: Santiment

The number of Bitcoin wallet addresses holding BTC has been decreasing over the past month, according to data from onchain analytics firm Santiment.

While this may initially seem concerning, Santiment suggests that it could actually be good news for investors.

On July 18, Santiment reported that the number of Bitcoin addresses with a balance greater than zero has dropped by 672,510 over the past month.

The decline in wallet addresses aligns with the downtrend in Bitcoin’s price since it peaked above $70,000 in early June.

Bitcoin Addresses Yet to Rebound Despite Recent Recovery

Despite a recent recovery that pushed BTC back above $65,000, the chart has yet to demonstrate a significant rebound.

However, historical patterns indicate that increases in BTC holder numbers tend to follow spot market recoveries with a delay of several weeks.

Santiment highlights a potential silver lining in the situation, suggesting that traders may believe the all-time high achieved in March was the peak for 2024.

“When we see mass liquidations like this, the probability of a continued rebound only increases,” the firm wrote.

The ongoing decline in wallet addresses holding BTC could set the stage for such a rebound in the future.

👋 Bitcoin's amount of holders (any wallets with >0 coins) have been dropping aggressively as traders still seem to believe the March ATH was as good as it's going to get in 2024. When we see mass liquidations like this, the probability of a continued rebound only increases. pic.twitter.com/YTHEFTtfhY

— Santiment (@santimentfeed) July 17, 2024

Meanwhile, there has also been a decline in the percentage of Bitcoin supply in profit, currently standing at 89.43% according to Glassnode data.

While this might appear discouraging, other metrics paint a more bullish picture.

In a recent post, CryptoQuant founder Ki Young Ju noted that over-the-counter (OTC) markets are dominating centralized exchange markets, indicating institutional accumulation.

Large whale wallets, including spot ETFs and custodial wallets, have acquired 1.45 million BTC this year, totaling approximately 9% of the circulating supply.

The weekly inflow to these whale entities has surpassed the total for the entire year of 2021, with an impressive 100,000 BTC flowing in each week.

Despite a decline in trading volume on centralized crypto exchanges for the third consecutive month, Bitcoin spot markets have experienced a recovery, gaining 12% over the past seven days.

At the time of writing, Bitcoin’s price hovers around $64,800.

Bitcoin Spot ETFs See Inflows for 9th Consecutive Day

Bitcoin spot ETFs experienced have recorded net inflows for the ninth consecutive day.

On July 17, these ETFs collectively received a total net inflow of $53.3475 million.

Notably, Grayscale’s Bitcoin Trust (GBTC) observed a net outflow of $53.8612 million on the same day.

In contrast, BlackRock’s Bitcoin ETF (IBIT) saw a net inflow of $110 million, while Fidelity’s Bitcoin ETF (FBTC) received a net inflow of $2.8259 million.

As reported, digital asset investment products saw inflows totaling $1.44 billion last week, pushing year-to-date inflows to a staggering $17.8 billion, far exceeding the $10.6 billion recorded in all of 2021.

Bitcoin attracted the fifth-largest weekly inflows on record, totaling $1.35 billion.

Conversely, short-Bitcoin products experienced the largest weekly outflow since April, amounting to $8.6 million.