In the past couple of weeks, the cryptocurrency market has witnessed a correction in bitcoin’s value to approximately 11%. This decline has been accompanied by significant volatility in bitcoin’s price movements. Despite a brief rebound to $58,000, bitcoin is still far from reaching its previous all-time high levels. Recent on-chain data provided by the blockchain market intelligence firm Santiment indicates a notable trend. Bitcoin wallets holding less than 1 BTC have been actively accumulating the digital asset. The data reveals that these small holders have increased their bitcoin supply distribution to 7.22%, marking the highest percentage since February 7th.
According to Santiment’s analysis, the price of bitcoin could experience a substantial surge under certain conditions. While wallets with less than 1 BTC are increasing their holdings, wallets with 1-100 BTC and those holding more than 100 BTC have shown a decrease in accumulation. The peak supply distribution for the latter two categories was recorded on July 27th and August 14th, respectively. Santiment suggests that for bitcoin’s price to approach its previous peak value of $73,700, holders with 1-100 BTC need to continue accumulating, and those with more than 100 BTC must increase their holdings significantly.
In recent weeks, there has been a trend of outflows from bitcoin and related assets. This includes significant withdrawals from United States spot Bitcoin exchange-traded funds (ETFs) over a period of almost two weeks. However, there are instances of positive developments as well. For example, the Japanese investment firm Metaplanet recently acquired 38.464 BTC, equivalent to $2 million. This purchase increased the firm’s total bitcoin holdings to 398.832 BTC, valued at $26 million. Despite this substantial acquisition, the impact on bitcoin’s overall value has been minimal.
Despite the current price movements, many proponents remain optimistic about bitcoin’s long-term prospects. MicroStrategy’s co-founder Michael Saylor has even predicted that bitcoin could reach as high as $13 million in the next two decades. The belief is that if larger buyers such as MicroStrategy and major Bitcoin ETF products continue to see significant inflows of BTC, the value of the digital asset could experience a significant surge. This optimism is based on the premise that institutional investors and big buyers will play a crucial role in driving bitcoin’s value over the long term.
