Bitcoin whale balances shrink at fastest pace since 2022 bear market

Bitcoin whale balances are shrinking year-over-year at the steepest rate of this cycle, matching March 2022 bear market conditions when accumulation stalled before turning negative, CryptoQuant data shows.

"Whale wallets holding 1,000 to 10,000 BTC are reducing exposure at a pace not seen since the 2022 downturn," analysts at CryptoQuant wrote in a note. "Accumulation stalled before flipping to net distribution during that period."

The whale contraction coincides with a broader institutional pullback. US spot Bitcoin ETFs have shed $2.8 billion over nine consecutive sessions through Wednesday, the longest outflow streak of the year, SoSoValue data shows. BlackRock's IBIT accounted for the bulk of the redemptions, with a single-day outflow of $527.84 million. Bitcoin traded at $75,567 as of 14:00 UTC, below all four key exponential moving averages — the 20-day at $77,428, the 50-day at $76,677, the 100-day at $76,812 and the 200-day at $81,367.

The divergence between declining whale balances and long-term holder accumulation — which has remained positive since early March, per Glassnode — sets up a critical test. If whale distribution accelerates, the path opens toward the $71,773 support level (0.618 Fibonacci), a 6 percent to 7 percent decline from current levels. A recovery requires a daily close above $75,973 (0.382 Fibonacci).

ETF Outflows Signal Institutional Caution

Weekly ETF outflows accelerated from $1 billion in mid-May to $1.26 billion the following week, with this week's total at $1.30 billion, SoSoValue data shows. Galaxy Research analysts described the outflows as a "real directional recalibration" rather than routine profit-taking. Strategy, the largest corporate Bitcoin holder with more than 840,000 BTC worth over $65 billion, temporarily paused its acquisition program to repurchase $1.5 billion of its convertible debt after posting a $12.54 billion quarterly net loss.

What the Whale Data Means for Price

The March 2022 parallel is the most concerning signal for bulls. During that period, whale accumulation stalled for weeks before turning into sustained distribution, preceding Bitcoin's decline from $45,000 to below $20,000 over the following months. The current setup differs in one key respect: long-term holders — wallets holding Bitcoin for more than 155 days — have been net accumulating since early March, with daily inflows often exceeding 100,000 BTC, Glassnode data shows. If that cohort flips to distribution during this drawdown, the comparison to the 2022 bear market would strengthen, opening the path toward the mid-$60,000 range.

This article is for informational purposes only and does not constitute investment advice.