- The world’s largest cryptocurrency, Bitcoin, faced strong selling pressure earlier this week as the BTC price dropped below $40,000.
- On-chain data provider Santiment reported a notable decrease in the total number of Bitcoin wallets.
- Investors are anxiously watching Bitcoin price movements for insights into the future. Currently, BTC is trading at $40,600, showing a 1.6% increase.
With Bitcoin price starting to succumb to selling pressure on Monday, significant movements were observed in on-chain data.
Drop in Bitcoin Wallet Numbers
The world’s largest cryptocurrency, Bitcoin, faced strong selling pressure earlier this week as the BTC price dropped below $40,000. Amid the current selling pressure, there is a significant liquidation happening in small Bitcoin wallets.
On-chain data provider Santiment reported a notable decrease in the total number of Bitcoin wallets, marking the fastest decline since the beginning of October, just before the start of the major crypto bull cycle. This trend indicates a similar level of impatience among investors.
In the past four days alone, more than 487,000 wallets holding 1 BTC or less each were liquidated. Historical patterns suggest that such rapid drops in wallet numbers are often associated with capitulation, a stage that could precede a surge in market prices.
This trend may persist until smaller traders regain confidence in cryptocurrency as a reliable investment vehicle. The recent disappointment in market performance following the approval of eleven ETFs in the last two weeks is considered a significant factor contributing to wallet liquidations.
Santiment suggests that these developments may be a sign of a shift in sentiment among small traders, indicating that the market is preparing for potential adjustments.
What to Expect for Bitcoin?
Investors are closely watching Bitcoin price movements for insights into the future. Currently, BTC is trading at $40,600, showing a 1.6% increase with a market value of $786 billion. However, analysts warn of the possibility of another 15-20% drop in BTC price, cautioning that in such a scenario, Bitcoin’s price could likely fall another 15-20%.
In a recent assessment, a crypto analyst issues a warning that short-term BTC holders may face losses if Bitcoin’s price drops below $38,130. He emphasizes that this potential decline in Bitcoin’s value signals the crypto community and underscores the importance of monitoring Bitcoin’s price movements and being prepared for potential market reactions.
