Bitcoin Retailers Retreat? Small Wallet Addresses Decline Sharply As Market Turns Volatile

The general crypto market has turned volatile, with Bitcoin, the largest digital asset, experiencing bearish movements as it falls below the key $95,000 price mark. Presently, BTC is gradually picking up steam, pushing prices close to $97,000. However, the recent waning price performance has hindered investors’ sentiment as a large portion of BTC small holders are exhibiting skepticism toward the asset by persistently offloading their coins.

Small Bitcoin Wallet Addresses Vanish Rapidly

With Bitcoin hovering near key support levels and showing early signs of renewed bearish pressure, it has triggered concerns about its short-term upside potential. During this waning period, Ali Martinez, an on-chain expert and trader, has outlined a negative behaviour among BTC small investors.

This persistent negative sentiment is observed among small wallet addresses holding 1 BTC or more, often regarded as Shrimps holders. These wallet addresses, which are linked to newcomers and retail investors, seem to be leaving the market due to recent price fluctuations and uncertainty.

Data shows that the number of these wallets with at least 1 BTC has significantly declined by over 3,400 over the past two weeks. The drop in these wallets suggests that small investors are losing confidence in BTC’s short-term prospects, even as larger holders consider expanding their holdings.

Given the ongoing correction, this development marks a pivotal moment in BTC’s current cycle performance. Should this trend continue, it is likely to trigger short-term contractions in Bitcoin’s price, causing the flagship asset to revisit the next key support level at $92,000.

Ali Martinez has also highlighted a similar waning sentiment among whale investors in the face of renewed market turbulence. On-chain data shows a notable selling pressure among these big investors as they offload a huge chunk of their holdings.

Over the last ten days, whale wallets holding between 1,000 BTC and 10,000 BTC have sold off about 50,000 BTC. According to Martinez, this heightened selling pressure by whales is “a clear sign of profit-taking at current levels.” Specifically, it implies that high-net-worth investors are choosing to secure profits or hedge against potential continued price corrections.

Such a huge selling pressure by whale holders reflects waning conviction about Bitcoin’s future as the flagship asset displays weakening momentum after a brief period of upward trend. Given that big investors are repositioning, speculations are whether the trend could lead to a robust shakeout for Bitcoin.

Several Key BTC Metrics Are Dropping

BTC’s waning performance has extended to several key metrics. FundingVest, an on-chain analyst and author, noted that Binance data indicate increasing short pressure while spot accumulation continues. 

Other metrics, like Open Interest (OI), have fallen by over 37%, funding rates have shifted toward negative territory, and the spot is rising higher than perpetual. These developments suggest that the market might be entering a reset mode or accumulation phase. However, the expert is confident that this can be a prelude to the next bullish trend for BTC.