Bitcoin's Whale Exodus: A 9-Month Low in Large Holder Supply Signals Deeper Sell-Off

Large Bitcoin holders are shedding the asset at a record pace. According to Santiment, whale and shark wallets (10-10,000 BTC) now control just 68.04% of the total supply, their lowest level in nine months. This exodus has been brutal, with -81,068 BTC dumped in just eight days.

The price action confirms the sell-off. Bitcoin has fallen roughly 27% from around $90,000 to $65,000 over that same period, sliding to its lowest level since October 2024. This sharp drop has deepened fears the asset is entering a prolonged bear phase.

The divergence between whale selling and retail accumulation is a classic warning sign. Santiment notes this combination is historically linked to longer bear-market cycles. While large holders are exiting, smaller "shrimp" wallets have been aggressively buying, a dynamic that often defines extended downturns.

Mechanics of the Selloff: Liquidations and On-Chain Pressure

The price collapse has triggered a violent liquidation cascade. Bitcoin recently fell below $60,000, a level that sparked more than $1.2 billion in leveraged positions to be liquidated. This forced selling amplified the downward move, turning a discretionary selloff into a mechanical unwind. The pattern mirrors the 2022 FTX collapse, where rapid price declines triggered a wave of stop-losses and margin calls.

On-chain data reveals the depth of pain for leveraged traders. Key reference points remain far above the current market price. The STH cost basis sits at $94,000, while the Active Investors Mean is at $86,800. These models represent the average entry price for large, active holders, indicating that a massive portion of the market is underwater. The Bitcoin Realized Price, which tracks the average cost basis of circulating supply, sits at $55,600, highlighting a stark disconnect between current market value and the average holder's cost.

This setup creates a fragile market structure. Persistent outflows from US spot Bitcoin ETFs, which have seen net withdrawals of over $6 billion in four months, have thinned the pool of steady, price-insensitive buyers. When the price breaks key levels, the lack of automatic bid support allows liquidations to dominate price discovery, making the tape appear to react to hidden catalysts. In reality, the sell-off is being driven by observable plumbing: thin liquidity, forced leverage unwinds, and a shift in who is standing on the other side of the trade.

Catalysts and Risks: The Path to $50,000 or Lower

The immediate path looks down. After a brief bounce off Thursday's lows, analysts warn selling pressure from ETF outflows and risk-off flows could push Bitcoin toward $40,000 to $50,000. The catalysts are clear: institutional investors are unwinding positions, with the average ETF cost basis at $90,000 and those holdings now materially underwater. This forces a sell-the-dip dynamic during U.S. trading hours, thinning liquidity and amplifying volatility.

Any near-term rally is likely a dead cat bounce. Crypto strategist Benjamin Cowen argues the cycle may not bottom until October 2026. He points to historical patterns where bear markets move through key technical levels, and any recovery now would be temporary. The setup favors further downside, with forced liquidations still a risk as the price tests critical support.

The key watchpoint is accumulation. Long-term holder supply, which tracks addresses holding for 155+ days, is not buying the dip. This lack of accumulation from the core, patient capital is a red flag. In prior cycles, such behavior often preceded deeper lows. For now, the tape is being driven by forced selling and ETF outflows, not by new conviction. The market remains fragile, with the next major test likely in the $50,000-$60,000 range.