As Santiment analytics disclose an accelerating decline in wallets holding one or more Bitcoin, the cryptocurrency industry has gone abuzz.
Crucial for gauging mood in the market, this indicator has been progressively dropping as traders become less optimistic that Bitcoin may rise beyond its historic high of $73,750, which it last touched on March 14. The general feeling in the market is that people don’t think Bitcoin will reach a new all-time high this year.
Largely due to “fear, uncertainty, and doubt” (FUD), smaller investors of the asset tend to sell off their holdings, a pattern that is reminiscent of previous market cycles.
It is interesting to note that after a large number of smaller buyers sell their Bitcoin, bigger holders usually start to buy more. This could set the stage for future rallies. At first glance, this trend seems worrying, but it could be setting the stage for the next bull market.
Bitcoin’s amount of holders (any wallets with >0 coins) have been dropping aggressively as traders still seem to believe the March ATH was as good as it’s going to get in 2024. When we see mass liquidations like this, the probability of a continued rebound only increases. pic.twitter.com/YTHEFTtfhY
— Santiment (@santimentfeed) July 17, 2024
Bitcoin: Past Patterns Point To A Recovery
Santiment notes that historical patterns show that big declines in wallet activity frequently precede notable price rebounds. Long-term investors recognize that these times of smaller holdings’ capitulation typically provide ideal conditions for future price spikes.
People who use Bitcoin have seen similar patterns in the past, where the number of active wallets dropped a lot and then prices recovered again. There are 672,510 fewer Bitcoin owners now than there were a month ago, data by Santiment show. This could mean that the price is about to go up again.
As of this writing, the price of Bitcoin is $64,894, down significantly from its most recent peaks but still in a strong position that gives investors optimism.
Expert Forecasts Fuel Hope
Reiterating his optimistic stance on Bitcoin, well-known proponent of the cryptocurrency and CEO of Jan3 Samson Mow has added another level of fascination to the present state of the market.
Mow, who is well-known for his unwavering support of the leading cryptocurrency, has set a lofty goal: he believes that Bitcoin might soar to $1 million in the coming year.
The bull run starts at $0.1M.
This is just the unwinding of the fakery to make retail think #Bitcoin is over.
— Samson Mow (@Excellion) July 17, 2024
According to him, if Bitcoin reaches $100,000, it will spark off a bull run that would take the cryptocurrency to previously unheard-of heights.
At the same time, MicroStrategy, the company with the most bitcoins, is also feeling upbeat. “Bitcoin to the Moon,” the most recent comment on X of its co-founder and executive chairman, Michael Saylor, supported Mow’s positive outlook and gave institutional investors more reason to be hopeful.
Bernstein experts, for their part, have raised their estimates for Bitcoin’s price. They now think it could reach $200,000 by 2025 and even $1 million by 2033.
They say this is because of the rise in demand for spot Bitcoin ETFs and the recent halving of the block reward, which reduces the number of new Bitcoins coming onto the market.
Featured image from Shutterstock, chart from TradingView