On-chain data suggests that around 729,400 bitcoin wallets liquidated themselves in the last month. Here's what could be behind this trend.
bitcoin wallets with balance have taken a big hit in the last month
in a new mail In
“Total Number of Holders” here refers to an indicator that tracks the total number of addresses that have a non-zero balance on the blockchain.
When the value of this metric increases, it means that new addresses are appearing on the network or that some former investors have returned to the cryptocurrency.
Whatever the case, this type of trend can be a constructive signal for the cryptocurrency (at least in the long term), as it suggests that greater adoption is occurring.
On the other hand, the fall of the indicator implies that some investors have decided to sell the entire amount they have in their wallets. This trend suggests that a net number of holders have decided to exit the asset.
Now, here is a graph showing the trend in the total number of bitcoin, ethereum and Tether holders over the past year:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/02/There-were-729400-Bitcoin-wallets-left-last-month-what39s-happening.jpeg" alt="Total number of bitcoin holders” width=”2662″ height=”1733″/>
The value of the metric seems to have gone down for btc in recent weeks | Source: Santiment on X
As shown in the chart above, the “Total Number of Holders” has been declining for bitcoin since January 20, while the indicator has continued to rise for ethereum and Tether.
This would imply that an outflow of btc has occurred, while the other major assets in the sector have continued to enjoy greater adoption. What is behind this discrepancy? The answer to this may lie in an event that is specific only to the original cryptocurrency.
On January 10, the US Securities and Exchange Commission (SEC) finally approved spot exchange-traded funds (ETFs) for bitcoin. ETFs are investment vehicles that allow investors to gain indirect exposure to their underlying assets.
ETFs trade on traditional markets, so they may be a more attractive option for those unfamiliar with how cryptocurrency exchanges and wallets work.
Perhaps it's no coincidence that the metric peaked ten days after the ETFs were approved and has been declining ever since. “This is attributed to the growing interest in hodlers getting exposure through ETFs,” explains Santiment.
As this option is not available for the other cryptocurrencies, it is not surprising that its adoption has continued to increase in the same period. For both ethereum and Tether, the “Total Number of Holders” stands at all-time highs of 114.95 million and 5.22 million, respectively.
“For any future assets with ETFs, there would be an implied drop in active portfolios on their respective networks,” the analytics firm says.
btc Price
bitcoin is a bit stagnant at the moment as the asset's price has generally consolidated sideways over the past week.
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/02/There-were-729400-Bitcoin-wallets-left-last-month-what39s-happening" alt="bitcoin price chart” width=”1534″ height=”854″/>
Looks like the price of the asset has been stale recently | Source: BTCUSD on TradingView
Featured image by Erling Løken Andersen on Unsplash.com, Santiment.net, TradingView.com chart
