In a striking shift in the Bitcoin landscape, recent reports indicate that major holders of the cryptocurrency, often referred to as ‘whales’, are consolidating their positions and trimming their stakes. This change comes in the wake of turbulent price movements that have rattled the market.
According to insights from Santiment, wallets containing between 10 and 10,000 BTC—known as the ‘whale and shark’ cohort—have now reduced their combined share of Bitcoin’s total supply to around 68%, the lowest level seen in the past nine months. This significant pullback coincided with a notable sell-off, with approximately 81,068 BTC leaving these wallets in just eight days.
Whales Exit, Retail Buyers Step Up
As larger holders pare back their exposure, the tide has turned in favor of smaller investors. Retail buyers are increasingly stepping in to fill the void left by whales. Notably, ‘shrimp’ wallets, which consist of accounts holding less than 0.1 BTC, have surged to their largest share of Bitcoin’s supply since mid-2024, now representing about 0.24%.
This reversal pattern has become somewhat of a trend: as large holders offload their coins, smaller accounts eagerly scoop them up during price dips, causing more pronounced fluctuations in market prices as this rebalancing takes place.
Market Movements and Their Implications
The recent price trajectory of Bitcoin has certainly contributed to this narrative. Following its ascent into the low $60,000s, Bitcoin fell sharply to around $59,000 before staging a comeback back into the mid-$60,000s. This volatility played out against a backdrop of broader risk market troubles, prompting traders to act quickly.
The pressure in the market is evident through ETF flows and futures, while on-chain data suggests that large holders have been eager to cut their positions as retail investors move in to seize opportunities.
What’s been behind the Bitcoin crash that has seen prices fall to as low as $60,001 for the first time since October, 2024?
🐳 Whale and shark wallets holding 10-10K Bitcoin now hold a 9-month low 68.04% of the entire $BTC supply. This includes a dump of -81,068 BTC in just… pic.twitter.com/Yyd20dy3nS
— Santiment (@santimentfeed) February 6, 2026
The driving forces behind the recent sell-off appear to be tethered to both shifting risk appetites and prevailing market conditions. Ki Young Ju, CEO of CryptoQuant, noted a pervasive sense of bearish sentiment among Bitcoin analysts, which could be compelling traders to close positions and take quicker losses.
Sentiment Plummets to 2022 Levels
In tandem with these market dynamics, the Crypto Fear & Greed Index has plunged to a dismal 9, indicating ‘extreme fear’, a sentiment not seen since mid-2022. Heightened fear often results in tighter liquidity, amplifying price movements. Even minor catalysts in such an environment can elicit exaggerated responses from the market.
When large holders withdraw while small accounts accumulate, it triggers shifts in market structure. This thinning of liquidity at certain price levels can result in deeper dips and sharper rallies, depending on the resurgence of buying interest. Historically, periods of such volatility may lead to extended consolidation or signal the onset of a significant trend reversal.
Understanding the Broader Context
Some market participants attribute the latest turbulence to geopolitical occurrences and macroeconomic headlines. Reports of a global risk-off attitude—including weakness in tech stocks and ongoing trade tensions—have crept into the crypto space, impacting sentiment.
Nevertheless, it’s crucial to remember that Bitcoin remains resilient, staying well above numerous long-term support levels watched by traders. Many long-term holders continue to accumulate despite the recent corrections, creating potential for recovery if fear subsides and larger investors choose to reinvest their capital.
Featured image from Pexels, chart from TradingView
