Bitcoin (BTC) Wallet Addresses Drop, But Spot ETF Inflows Rise, Suggesting a Potential Market Rebound

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.

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.

This decrease in wallet addresses might seem concerning at first glance; however, historical patterns observed by Santiment hinted at a potential market rebound.

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

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

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

While the number of Bitcoin wallet addresses has decreased, Bitcoin spot ETFs have recorded net inflows for the ninth consecutive day.

On the 17th of July, these ETFs collectively received a net inflow of $53.3475 million.

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.

As reported by The Block, 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, such as the Bitcoin Realized Cap HODL Waves, suggested a more optimistic outlook.

According to CryptoQuant’s founder Ki Young Ju, 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.

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