SKN | Large Bitcoin Holders Cut Exposure as Whale Supply Share Falls to Nine-Month Low

Key Points

• Large bitcoin holders now control the smallest share of supply since late May, after selling more than 81,000 BTC in eight days.

• Market sentiment has plunged to extreme fear levels, with analysts broadly turning bearish as prices slide.

• Retail investors are accumulating aggressively, a pattern that has historically coincided with bear market phases.

Bitcoin’s latest price decline is being accompanied by a notable shift in on-chain ownership, with large holders reducing their grip on the network’s supply at the fastest pace in months. Data from crypto analytics firm Santiment shows that wallets holding between 10 and 10,000 bitcoin  commonly referred to as “whales and sharks”  now control the smallest share of supply since late May, underscoring growing caution among influential market participants.

According to Santiment, these large wallets currently account for roughly 68.04% of bitcoin’s circulating supply, a nine-month low. The decline reflects net selling of about 81,068 BTC over the past eight days alone, a period during which bitcoin slid from around $90,000 to near $65,000  a drawdown of roughly 27%. Bitcoin was trading close to $64,800 at the time of publication, after briefly dipping just above $60,000, based on data from CoinMarketCap.

Whale Behavior Signals Shifting Conviction

Market participants closely monitor large holders because their behavior often foreshadows broader trend changes. Historically, sustained accumulation by whales has coincided with bull phases, while distribution has tended to appear near market tops or during the early stages of prolonged downturns.

Santiment noted that the recent reduction in whale and shark holdings suggests a loss of conviction at higher price levels. The selling has coincided with rising volatility and weakening technical structure, reinforcing concerns that bitcoin’s recent slide is more than a short-term correction.

That caution is echoed across the analytical community. Ki Young Ju, CEO of CryptoQuant, wrote on social media this week that “every Bitcoin analyst is now bearish,” reflecting the extent to which sentiment has deteriorated following the sharp drawdown.

Sentiment Hits Extreme Lows

Broader market psychology has also turned decisively negative. The Crypto Fear & Greed Index, a widely followed gauge of digital asset sentiment, fell to a reading of 9 out of 100 on Friday  its lowest level since mid-2022, when markets were still absorbing the collapse of the Terra ecosystem. Such extreme readings typically indicate widespread fear and risk aversion, though they have historically appeared near both capitulation points and the early stages of extended bear markets.

The speed of the recent decline has added to anxiety. Bitcoin’s fall from the $90,000 area to the mid-$60,000s in little more than a week has triggered forced liquidations across derivatives markets, amplifying downside pressure and reinforcing a feedback loop of selling.

Retail Investors Move the Other Way

While large holders are trimming exposure, smaller investors are moving in the opposite direction. Santiment data shows that so-called “shrimp wallets,” defined as addresses holding less than 0.1 BTC, have climbed to a 20-month high. This cohort now controls about 0.249% of bitcoin’s total supply, equivalent to roughly 52,290 BTC.

The pattern of retail accumulation alongside whale distribution is a familiar one in crypto market cycles. Santiment warned that this combination has “historically created bear cycles,” as smaller investors often buy into weakness while larger, more informed players reduce risk.

A similar dynamic played out in mid-2024, when bitcoin traded around $66,000 before sliding to roughly $53,000 two months later. By December 2024, however, the market had rebounded sharply, with bitcoin reaching $100,000 for the first time amid a surge in post-election optimism following Donald Trump’s victory in the U.S. presidential race.

Watching for the Next Signal

The current divergence between large and small holders leaves bitcoin at an inflection point. Continued whale selling could deepen the downturn and reinforce bearish momentum. Conversely, a slowdown in distribution or renewed accumulation by large wallets would be one of the clearest early signals that confidence is returning.

For now, the decline in whale-controlled supply highlights a market recalibrating after months of elevated expectations. Whether this phase evolves into a prolonged bear cycle or sets the stage for eventual stabilization will likely depend on how long large holders remain on the sidelines  and whether retail demand can persist without institutional support.