Bitcoin: Why a declining number of wallets can’t stop BTC’s rebound

• Declining Bitcoin addresses indicated a potential market rebound, following historical recovery patterns.
• Strong institutional interest and ETF inflows supported the market, with whale acquisitions surpassing 2021 totals.

The number of Bitcoin [BTC] wallet addresses holding BTC has decreased significantly over the past month, according to data from on-chain analytics firm Santiment.

This decline, totaling 672,510 addresses, coincided with Bitcoin’s price drop since its peak above $70,000 in early June. 

Despite a recent recovery pushing BTC back above $65,000, the number of wallet addresses has not shown a significant rebound.

While the drop in wallet addresses might seem concerning, historical patterns suggested a potential market rebound.

According to Santiment, increases in BTC’s holder numbers typically followed spot market recoveries, with a delay of several weeks. 

 Santiment reported, 

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

This historical trend indicated that the press time decline in wallet addresses holding BTC could set the stage for a future recovery.

Bitcoin ETF inflows rise 

Despite the decrease in wallet addresses, Bitcoin spot ETFs have recorded net inflows for the ninth consecutive day. On the 17th of July, these ETFs collectively

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

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

While there has been a decline in trading volume on centralized crypto exchanges for the third consecutive month, Bitcoin spot markets have shown signs of recovery, gaining over 10% over the past seven days.

At the time of writing, Bitcoin’s price traded at $64,800. 

Additionally, institutional accumulation appears robust, with large whale wallets, including spot ETFs and custodial wallets, acquiring 1.45 million BTC this year, approximately 9% of the circulating supply.

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

Supply in profit declines

The percentage of Bitcoin supply in profit has declined to 89.43% at press time, according to Glassnode. Despite this decline, other metrics suggested a more optimistic outlook.

Read Bitcoin’s [BTC] Price Prediction 2024-25

CryptoQuant’s founder Ki Young Ju noted that over-the-counter (OTC) markets were dominating centralized exchange markets, indicating continued institutional accumulation. 

This trend, coupled with the decrease in wallet addresses, suggested a potential for a future market rebound.