Cryptocurrency wallets are flowing out amid Bitcoin's decline – are we heading for a repeat of 2021?

Bitcoin is stuck in turbulence. At the current price hovering around $91,77K, every attempt to rise encounters immediate selling pressure. On-chain data suggests, however, that there is more behind this weakness than mere market volatility – the wallets of the biggest players are systematically reducing their positions.

Whales and sharks wallets in retreat

On-chain data analysis shows a concerning trend: the number of wallet addresses belonging to large Bitcoin holders is decreasing. Considering the simultaneous outflows from Bitcoin ETFs, this indicates increasing bearish sentiment among institutional market participants.

Santiment-approved research reveals that the number of cryptocurrency wallets holding at least one Bitcoin has decreased by 2.2% since the March peak. This means smaller wallets have been systematically divesting their holdings. The only positive news – wallets with larger amounts of BTC increased their holdings by approximately 136,670 Bitcoin in the same period. This suggests that big investors are accumulating assets at lower levels, while less wealthy are selling.

Is history repeating itself? Tracer warns of a past scenario

Analyst Tracer pointed out a worrying similarity to the 2021 cycle. The current market structure shows a pattern characteristic of that period: double top, followed by a sharp decline, a temporary rebound, and then another sell-off.

The scenario could look like this: BTC temporarily rebounds toward $100K, but if history repeats, a sharp drop below $60K could occur. Tracer noted that many market participants might be completely unprepared for such a sequence of events.

Negative correlation with tech stocks and gold

Bitcoin currently exhibits a strong negative correlation with shares in technology companies and traditional safe havens – gold and silver. This means that Bitcoin neither gains when tech stocks rise nor does it do so when precious metals increase. This disconnect suggests that cryptocurrency portfolios may be forced to reallocate capital elsewhere.

Outflows from ETF wallets accelerate

US Bitcoin ETFs are experiencing significant capital outflows. Last week, outflows amounted to $497 million, and the trend continues this week. According to Farside Investors, the total outflow from all US Bitcoin ETFs has increased to $188 million.

The biggest loss was suffered by BlackRock iShares Bitcoin Trust (IBIT), which recorded an outflow of $157.3 million and withdrew 1,792 Bitcoin from the fund. IBIT shares remain around $50, reflecting overall sector pressure.

Is this the end of the rally?

The current Bitcoin market situation indicates converging negative factors: whale wallets are reducing positions, regular cryptocurrency wallets are shrinking, and institutional funds are pulling capital out. If history truly repeats itself, the coming weeks could be decisive for the entire cryptocurrency market.