Increasing Bitcoin (BTC) Whale Activity as Smaller Holders Decline During Market Recovery
The number of large Bitcoin wallets is on the rise, even as smaller holders disappear during efforts to recover from recent market declines.
Bitcoin (BTC) has shown a slight recovery, currently trading around $87,000 after weeks of sharp declines. Interestingly, while large Bitcoin holders have increased, smaller holders are vanishing.
This trend suggests potential long-term price stability.
Retail Sells, Whales Buy
Recent data from Santiment indicates that wallets holding at least 100 BTC have surged by 0.47% since November 11, adding 91 wallets in under a month. Conversely, smaller wallets, especially those containing 0.1 BTC or less, are dwindling. Santiment has noted that such retail sell-offs have historically been constructive for cryptocurrency prices.
Many traders might find some comfort in this as the market shows signs of improvement. However, this uptick does not necessarily indicate the onset of a new bull market. According to insights from Matrixport, traders should view this recovery cautiously rather than as the start of a lasting trend.
Another area of concern is reflected in Bitcoin’s Sharpe Ratio, which has dropped near zero—a range historically associated with uncertain market conditions. Bitcoin appears to be re-entering a landscape akin to 2019, 2020, and 2022, where prolonged low Sharpe readings led to emerging multi-month trends.
While the indicator does not confirm a definitive market floor, if market volatility settles, future returns could improve. Typically, low-Sharpe periods offer enhanced asymmetric opportunities compared to euphoric phases.
Breakout Efforts
Notably, the Bitcoin Bull-Bear Structure Index and the Futures Flow Index remain bearish, but short-term indicators suggest a possible reversal. Analyst Axel Adler Jr. has reported that the Bull-Bear Index has remained bearish since November 11, with the BEAR line now at -36%, showing signs of recovery.
