Bitcoin Whales Grow as Small Holders Disappear During Fragile Market Rebound

Bitcoin has staged a mild recovery after a series of steep declines and is now trading near $87,000. While the recent bounce brings some relief, on-chain behavior shows an important shift: large holders are returning, and smaller wallets are starting to disappear.

New data from Santiment shows that wallets holding at least 100 BTC have increased by nearly half a percent since November 11—an addition of 91 new whale addresses in under a month. At the same time, the number of smaller wallets, particularly those with 0.1 BTC or less, has declined. Analysts interpret this as classic retail capitulation, a trend that has historically strengthened Bitcoin’s long-term price outlook as larger, more patient investors accumulate.

Despite the improvement, analysts warn that the environment is not yet signaling a new bull phase. Research firm Matrixport described the market as fragile and tactical, noting that short-term rebounds may be sharp but are unlikely to mark a sustained trend reversal. This sentiment is echoed by Bitcoin’s Sharpe Ratio, which has slipped close to zero—a zone associated with uncertainty and periods of early risk repricing.

This type of low-Sharpe environment has appeared during previous transitional phases in 2019, 2020, and 2022. While it doesn’t pinpoint an exact bottom, past cycles show that muted risk-adjusted performance often precedes the start of longer multi-month trends once volatility stabilizes. Historically, these periods have offered more attractive asymmetric setups than high-Sharpe, over-extended markets.

Additional on-chain indicators reflect similar mixed signals. The Bitcoin Bull-Bear Structure Index and the Futures Flow Index both remain in bearish territory, but subtle improvements suggest an attempted shift. Analyst Axel Adler Jr. noted that the Bull-Bear Index has been stuck on the bearish side since mid-November, with the BEAR line sitting at -36% but gradually lifting. Futures flow data has ticked higher as well, though it remains below the key level that would confirm a bullish transition.

Together, these indicators suggest that Bitcoin has been trying to break out of its bearish phase for several weeks—so far without a decisive confirmation. If volatility cools and accumulation continues, however, the groundwork for a stronger long-term trend may already be forming under the surface.