While Bitcoin (BTC) struggles to reclaim the $50,000 mark, the number of Bitcoin addresses holding less than 1 BTC has risen.
Since reaching an all-time high above $69,000, Bitcoin has undergone a sharp decline that pushed it below $50,000. On December 4, BTC fell to a three-month low of $42,333, raising concerns that the coin could slip under $40,000.
Addresses holding under 1 BTC driving current BTC price action
Data obtained by crypto-focused bulletin Ecoinometrics, after analyzing shifts in Bitcoin balances across small and large wallet cohorts, indicate that the rebound from the $42,000 low to current prices is largely attributable to increased buying activity among addresses holding less than 1 BTC. Addresses with 1,000 to 10,000 BTC appear to have contributed little to the recent support, so it is unsurprising the bullish momentum has not been strong enough to keep the asset above $50,000.
Ecoinometrics noted:
“Bitcoin remains stuck in a situation where smaller addresses are ready to stack sats [the smallest unit of Bitcoin], while whale addresses are not really accumulating.”
The bulletin also said the current valuation of Bitcoin is “not ideal” and could resume a downward move due to the absence of influential buyers.
Ecoinometrics’ cautious view came after the Federal Reserve released its policy decision on Wednesday, an event that briefly pushed most cryptocurrencies, including Bitcoin, slightly higher before prices turned red again shortly thereafter.
Galaxy Digital Holdings CEO Mike Novogratz commented:
“$42,000 is at a pretty significant level, and the low $40s should hold… So much money is flowing into the space, it would make no sense for crypto prices to go far below that. If you’re long, it’s painful, but it’s probably healthy.”
Retail BTC accumulation outpaces whales
Bitcoin wallets holding more than 1,000 BTC declined in 2021. Glassnode data showed the number of such wallets fell from 2,475 to 2,147 between February 9 and the present.
By contrast, the number of wallets holding less than 1 BTC rose notably. For example, addresses with at least 0.01 BTC increased from 8.46 million to 9.39 million wallets, while those holding at least 0.1 BTC grew from 3.12 million to 3.30 million wallets.