It appears that the number of Bitcoin wallet holders has decreased significantly over the past month. Because of this, the analysis showed that the likelihood of a future Bitcoin price rebound has increased.
What's new: Cryptocurrency online data platform Santiment posted this price analysis through X (formerly Twitter) on the 18th.
๐ 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
โ Santiment (@santimentfeed) July 17, 2024
Sentiment pointed out that the number of wallets holding zero or more bitcoins decreased by 672,510 compared to a month ago. This phenomenon occurs when Bitcoin holders dispose of the entire amount they have by sending it to an exchange or consolidating the amount scattered across multiple wallets.
According to cryptocurrency exchange Binance, during the same period, Bitcoin fell 2.64% in terms of price alone. However, if you look at the actual price trend, it fell to about $53,000 and then went through a process of rising again by the amount of the drop. In other words, after passing through a high volatility section where large losses are expected, more than 670,000 bitcoin holding wallets liquidated their stocks, and the price almost returned to its original level.
Why it's a bullish sign: Typically, the number of wallets holding Bitcoin is proportional to public interest in Bitcoin. However, recent data shows that prices move with a lag of several weeks. First, as the price rises, interest increases, and the number of wallets holding Bitcoin increases.
Sentiment explained, โThis phenomenon tends to appear before a cryptocurrency bull market unfolds,โ and โthe largest net decrease in the number of Bitcoin holders occurred from mid-September to mid-October 2023.โ
What's next: Between July 5 and July 16, when the biggest price rebound of the year occurred, the number of wallets holding Bitcoin actually decreased. This means retail investors' view of the current upside is limited. Previously, on the 16th, K33, a cryptocurrency research company, also pointed out this by comparing the Chicago Mercantile Exchange (CME)'s open interest growth rate with the cryptocurrency exchange's funding ratio.
Sentiment predicted that โthe number of wallets holding Bitcoin is still decreasing aggressively,โ and that โif such mass liquidation (of wallets) occurs, the probability that the rebound will continue will inevitably increase.โ As of 6 PM on the 18th, the price of Bitcoin is hovering around the $64,750 level, up 1.04% from the previous day.
