Key Takeaways:
Bitcoin’s (BTC) on-chain holder base just shrank at the fastest pace in two years, shedding 245,000 wallets in five days, even as bullish derivatives bets reached a two-year high. The divergence points to a fragile market structure, with retail conviction wavering while speculative leverage builds.
"The divergence between a shrinking on-chain holder base and extreme bullish leverage in derivatives markets creates a highly volatile and uncertain outlook," Glassnode analysts wrote in a note. "This setup significantly increases the risk of a long squeeze, where a minor price drop could trigger cascading liquidations."
The drop in holders comes as bitcoin’s price slipped back below $80,000 after a brief rally. On-chain data provider CryptoQuant noted that the rebound from April lows has been met with significant profit-taking, particularly from short-term holders. The 245,000 wallet decline represents the most significant five-day drop in two years, a sign of potential exhaustion among recent buyers.
This bearish signal from the spot market is at odds with other on-chain metrics. According to data highlighted by Glassnode, indicators like the Mayer Multiple Z-Score and the Bitcoin Sharpe Ratio have fallen into zones historically associated with cycle bottoms. Furthermore, the supply held by long-term holders—wallets that have held coins for at least 155 days—has returned to near-record levels, showing this cohort has largely refused to sell into the rally.
The market is now caught between conflicting signals. On one hand, the reduction in active holders and heavy profit-taking suggest the recent rally to $80,000 is hitting a wall of selling pressure. On the other, deep-value signals and the conviction of long-term holders suggest a bottom may be forming. This tension is amplified by the two-year high in long-side leverage, creating a powder keg for volatility. Glassnode identified the $85,200 level as the next major resistance zone, a key test for whether the market can absorb the current selling pressure and continue higher.
This article is for informational purposes only and does not constitute investment advice.
