- Bitcoin addresses holding over 1,000 BTC have declined significantly, hitting their lowest level since 2019
- Data from IntoTheBlock revealed a 24-hour outflow decline of -3.90%, a 7-day drop of -60.21%, and a 30-day decline of -80.23%
Bitcoin’s market structure has evolved significantly lately, with shifting supply dynamics among different holder categories shaping price movements. The distribution between whales, mid-tier holders, and smaller investors lends us some insights into future trends.
In fact, Bitcoin [BTC] addresses holding over 1,000 BTC have fallen significantly – Hitting their lowest level since 2019. Data from 2018 revealed these addresses peaked at 2.5 million. However, figures for the same soon dropped to 1.8 million by 2024.
This decline coincided with notable outflows of 500,000 BTC over three years, largely attributed to exchange-related movements.
Source: Alphractal
Conversely, smaller holders, particularly those with less than 1,000 BTC, sustained an accumulation trend. Figures for the same rose to 12 million in 2024. This accumulation trend aligned with Bitcoin’s price hike from $1 to $60,000.
Whale sell-offs have historically influenced Bitcoin’s price, particularly during the 2021 rally when BTC peaked at $64,000. The fall in dominance of large holders hinted at less susceptibility to sharp market manipulation.
Meanwhile, smaller holders tend to react to price action. So far, they have maintained a neutral position, accumulating a modest 50,000 BTC across the board.
Mid-tier and small-scale holders driving market stability
Addresses holding 100-1,000 BTC have played a significant role in market stability. The number of these addresses grew from 300,000 in 2010 to 1.2 million in 2024, accumulating 400,000 BTC since 2020.
These holders actively participated during the 2021 price surge, adding 150,000 BTC as the cryptocurrency approached $64,000 on the charts.
Source: Alphractal
On the contrary, addresses with under 100 BTC, which expanded from 4 million in 2010 to 10.8 million in 2024, followed a different pattern.
During the 2021 rally, these holders distributed 200,000 BTC, indicating a tendency to take profits rather than accumulate at peak levels. In 2024, they maintained a neutral position, adding only 30,000 BTC. This reinforced the historical trend of reducing exposure during bullish runs.
Source: Alphractal
This behavior is a sign of a maturing market, one where mid-tier holders play a stabilizing role. If addresses in the 100-1,000 BTC range continue accumulating at a rate of 50,000 BTC per quarter, Bitcoin could rise higher.
Conversely, if smaller holders liquidate 100,000 BTC during a rally, the price may retrace.
Bitcoin’s exchange outflows indicate market sentiment
Bitcoin outflows from exchanges can provide some critical insights into investor behavior. Data from IntoTheBlock revealed a 24-hour outflow decline of -3.90%, a 7-day drop of -60.21%, and a 30-day decline of -80.23%.
Initially, Bitcoin outflows peaked at 1.2 million BTC in 2021, before dropping to 700,000 BTC. This seemed to be in line with the decline in whale supply from 2.5 million to 1.8 million addresses.
Source: IntoTheBlock
Sustained exchange outflows indicate reduced selling pressure, as investors move assets to cold storage for long-term holding. Over the last three years, 500,000 BTC left exchanges – Indicative of a bullish market outlook.
However, the steep 30-day drop of -80.23% hinted at a sudden market shift, potentially driven by post-rally profit-taking. A reversal with 200,000 BTC flowing back into exchanges could allude to a hike in selling pressure, leading to a market correction.
Macroeconomic factors
Macroeconomic indicators, particularly the 5-year and 10-year Breakeven Inflation Rates (BIR), have correlated with Bitcoin’s price movements.
In fact, data from 2024 revealed that the 10-year BIR fell from 3.5% in 2021 to 2.5%, while the 5-year BIR dropped from 3.0% to 2.0%. This coincided with Bitcoin’s price depreciation from $64,000 in 2021.
Source: Alphractal
A lower BIR is a sign of reduced inflation expectations, shifting investor preferences towards traditional assets over inflation hedges like Bitcoin.
Historically, Bitcoin has thrived whenever inflation expectations were high, as seen in 2021 when the BIR peak of 3.5% coincided with BTC’s all-time high.
Investors should closely monitor BIR trends. Especially as a rebound to 3.5% could replicate the 2021 rally. Traders should integrate inflation data into their analysis to anticipate long-term shifts.
