The decline coincides with Donald Trump’s latest signal of diplomatic coordination with Chinese President Xi Jinping over the Strait of Hormuz, adding a geopolitical tailwind to an already tightening supply picture.

Wholecoiner Flows Hit Multi-Year Lows

Transactions of at least one full BTC sent to exchanges have fallen sharply. On the Binance exchange, the monthly average now sits around 6,000 BTC, far below the 15,400 BTC recorded in 2021.

At a global level, the picture is more pronounced. Total transfers of at least one BTC to exchanges have dropped to roughly 27,500 BTC, compared to 80,000 BTC at the 2018 peak.

Several factors explain the trend. Rising prices have made holding a full bitcoin increasingly difficult, reducing the pool of wholecoiners over time.

The expansion of trading platforms and the introduction of spot Bitcoin ETFs in 2024 now allow investors to gain exposure without directly holding BTC.

A growing share of holders also appears to favor long-term strategies, further reducing exchange activity.

“This decline in active wholecoiners on exchanges reflects both reduced selling pressure and a gradual transformation of market structure, with a growing share of supply becoming increasingly illiquid over time,” Darkfost wrote.

Short-Term Holders Take Profits While Shorts Pile In

While long-term holders pull back, short-term holders (STHs) have moved aggressively in the opposite direction.

When BTC tested the $75,000 level, STHs sent more than 65,000 BTC to exchanges within 24 hours, with 61,000 of those transfers locked in profit.

Analyst Michaël van de Poppe noted that the derivatives market is setting up for a potential squeeze. Funding rates have turned negative while open interest has climbed, meaning traders are overleveraged short as BTC tests resistance for the third time.

“…as long as BTC remains above $72K, I wouldn’t be worried, and I’d rather be looking for longs vs. shorts,” the analyst wrote.

He identified $85,000 to $88,000 as the next resistance zone if $75,000 breaks.

Separately, on-chain researcher Axel Adler Jr. flagged that Bitcoin’s Bull-Bear Index has flipped above zero, clearing the bear zone.

However, he cautioned that network profit and loss sentiment remains underwater, framing the current move as a recovery rather than a new bull regime.
source: https://www.tradingview.com/news/beincrypto:fd0c8fc58094b:0-bitcoin-wholecoiner-exchange-flows-drop-to-2018-levels-tightening-supply/