Bitcoin is facing significant selling pressure as retail investors liquidate their holdings, and institutional outflows continue amid global economic uncertainty. Data shows a decline in the number of Bitcoin wallets with non-zero balances, reaching a five-month low of 52.45 million, last seen in September 2024. This decrease in wallet activity highlights the growing trend of retail investors selling off their Bitcoin, as global markets remain volatile.
Bitcoin’s price reached an all-time high of $109,000 in January 2024, with over 52.56 million active wallets at that time. However, as the price has cooled down, many retail investors seem to be cashing out.
The main contributor to the current market volatility has been significant outflows from Bitcoin Exchange-Traded Funds (ETFs). As of February 12, Bitcoin ETFs recorded cumulative outflows of $251 million on that day alone, contributing to a total of $494 million in outflows over the last three days. This marks the third consecutive day of net negative outflows for Bitcoin ETFs, signaling a broader shift in investor sentiment.
Despite the outflows from ETFs, there is an ongoing accumulation of Bitcoin by large investors, also known as “whales.” In a notable development on February 5, large Bitcoin holders purchased over 39,620 BTC, worth more than $3.79 billion, when the price dropped below $97,600. This accumulation suggests that some institutional players see value at these price levels.
According to Juan Pellicer, a senior research analyst, the strong buying activity from whales could indicate that the Bitcoin market is nearing its bottom. “We have seen similar patterns in the past when large players accumulated at price lows, signaling the end of a capitulation phase,” Pellicer stated.
While Bitcoin’s price faces downward pressure from retail sell-offs and institutional outflows, the recent whale activity hints at a potential reversal in the market. Analysts are watching closely to determine whether these large-scale accumulations will help stabilize the market and push Bitcoin toward a recovery.
Investor sentiment is further impacted by geopolitical concerns, including ongoing trade tensions between the US and China, which continue to influence broader global markets. As tensions simmer, investors remain cautious and await key political developments, including potential meetings between US and Chinese leaders aimed at resolving the trade dispute.
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