Bitcoin is currently forming a pattern in its Total Amount of Holders, based on on-chain data, which has previously signaled a bullish trend for the cryptocurrency.
Recent Decline in Bitcoin’s Total Number of Holders
On-chain analytics from Santiment indicate that Bitcoin investors have been reducing their holdings amidst a bearish market trend. The “Total Amount of Holders” metric, which reflects the total number of addresses with balances on the network, has been declining.
An increase in this metric typically signifies new investors entering the network, returning investors, or existing users creating new addresses for privacy. This uptrend in holders is a positive indicator for long-term adoption of the cryptocurrency.
Conversely, a decrease in the Total Amount of Holders suggests that investors are withdrawing from the asset by emptying their wallets.
A comparative analysis of the top five cryptocurrencies – Bitcoin (BTC), Ethereum (ETH), XRP (XRP), Cardano (ADA), and Chainlink (LINK) – reveals a recent decrease in the total number of holders specifically for Bitcoin.
Over the past three weeks, approximately 566,000 BTC wallets have been emptied, possibly due to market uncertainties leading to investor exits.
In contrast, Ethereum, Cardano, and XRP have witnessed a rise in the number of holders, indicating continued adoption and interest in these altcoins.
While BTC’s decrease may suggest a movement away from the network, the presence of Fear, Uncertainty, and Doubt (FUD) could potentially benefit the cryptocurrency in the long run.
Historically, Bitcoin has demonstrated a tendency to move contrary to popular sentiment, with FUD often preceding a reversal of the price towards an upward trajectory.
Previous instances of declines in the total amount of holders for Bitcoin have coincided with market bottoms and subsequent rallies to new all-time highs, as observed in January.
According to Santiment, “Patient bulls should take comfort in self-liquidating wallets of non-believers as a potential signal of market bottoms driven by FUD, similar to previous instances.”
Current BTC Price
As of the latest data, Bitcoin is trading at approximately $57,400, reflecting a 7% decrease over the past week.
