Number of small cryptocurrency wallets declines sharply
Number of small cryptocurrency wallets declines sharply
The value of Bitcoin, the largest cryptocurrency by capitalization, has fallen below $40,000 as it faces heavy selling pressure.
This has contributed to the liquidation of many small Bitcoin wallets.
Network data provider Santiment noted the high rate of BTC wallet liquidations on its X (Twitter) page. "The total number of Bitcoin wallets is shrinking at the fastest rate since early October," it said.
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According to Santiment, more than 487,000 wallets holding one or less BTC have been liquidated since the beginning of the week.
The company stressed that this rapid decline in the number of wallets is a sign of capitulation that could lead to a rebound in market prices. This will continue until retail crypto investors regain confidence in digital assets.
Santiment believes that one of the key factors leading to the liquidation of BTC wallets is also the disappointment in market performance following the SEC's approval of spot Bitcoin ETFs on January 10, 2024.
Analysts at the firm said that these developments could signal a potential change in sentiment among retail traders.
Bitcoin is currently trading at $40,168, up 0.56% over the past 24 hours.
It is worth noting that recently, more analysts have been predicting that the BTC price will fall to $20,000 or even $10,000.
Crypto analyst Justin Bennett stated that Bitcoin could repeat its 2020 trajectory, and this would cause the price to fall to the $10,000 to $15,000 range.
Bennett pointed out that the 2020 COVID was a "black swan" for BTC, but that doesn't mean we don't have a problem this time around.
Prominent trader Il Capo of Crypto believes that the price of BTC could collapse to $12,000.
Although Arthur Hayes, former CEO of cryptocurrency exchange BitMEX, is a co-founder of Bitcoin's bull rally, he predicted that BTC would drop to $30,000 before recovering.
Analyst Ali Martinez said that if Bitcoin's price falls below $38,130, it will trigger a new wave of panic selling as holders try to minimize their losses.
Read also: Will Polygon overtake Ethereum in number of users?
