Although Bitcoin prices have recovered to around $65,000 recently, the number of BTC holders has not shown a significant rebound yet, which typically follows spot market recoveries by several weeks.
The number of Bitcoin wallet addresses holding BTC has significantly decreased over the past month, which could indicate a possible market rebound, according to on-chain analytics platform Santiment. On July 18, Santiment reported on X that there had been a reduction of 672,510 Bitcoin holders with a balance of more than zero BTC.
Potential for Market Rebound
Santiment suggested that some traders might think that the market peak in March was the highest point for 2024. However, the analytics firm noted that large sell-offs are often followed by market recoveries.
“When we observe such mass liquidations, the likelihood of a rebound increases,” Santiment stated.
👋 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
This trend follows a downtrend since Bitcoin last reached over $70,000 in early June. Although Bitcoin prices have recovered to around $65,000 recently, the number of BTC holders has not shown a significant rebound yet, which typically follows spot market recoveries by several weeks.
Market Metrics and Institutional Activity
Glassnode data shows that at the current price, 89.43% of Bitcoin’s supply is in profit, down by 6.5% from mid-June when BTC was near $70,000. However, other indicators suggest a positive outlook. CryptoQuant founder Ki Young Ju pointed out that over-the-counter (OTC) markets are currently overshadowing centralized exchanges, which indicates strong institutional accumulation.
Ju reported that whale wallets, including those holding more than a thousand coins, have added 1.45 million BTC this year, bringing their total to 1.8 million BTC, about 9% of the circulating supply. Ju also highlighted that the weekly inflow to these whale entities is now higher than the total for the entire year of 2021.
#Bitcoin OTC markets are overwhelming CEX markets.
Whale wallets (>1K BTC), including spot ETFs and custodial wallets, added 1.45M BTC this year, totaling 1.8M BTC.
In 2021, about 70K BTC flowed in over the year; now, it's 100K BTC "weekly." I repeat. 100K BTC weekly. pic.twitter.com/YJPJpMtMPL
— Ki Young Ju (@ki_young_ju) July 17, 2024
Trading Volumes and Broader Market Trends
Despite the decline in wallet addresses, Bitcoin spot markets have shown resilience, with prices hovering around $64,800 at the time of writing. Trading volumes on centralized crypto exchanges dropped by 21.8% in June, marking the third consecutive month of declines.
According to a July 17 report by CCData, the combined spot and derivatives volume across all centralized exchanges stood at $4.2 trillion in June, a 53% drop from the $9 trillion peak in March. Additionally, open interest across crypto derivatives exchanges fell by 9.7% due to liquidations triggered by a sharp drop in Bitcoin and other crypto assets.
Outlook for Bitcoin
In a recent update, popular crypto analyst Michaël van de Poppe shared an optimistic outlook for Bitcoin’s performance in the latter half of 2024. He emphasized that increasing inflows from exchange-traded funds (ETFs) could drive Bitcoin price higher.
Van de Poppe noted that Bitcoin saw significant net inflows from ETFs, exceeding $400 million last month, which indicates strong institutional interest and stability around the $65,000 mark. He suggested that Bitcoin’s price could potentially reach $100,000 in the near future, supported by ongoing institutional investments.
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