Bitcoin Sees Retail Exodus While Smart Money Accumulates

The number of non-empty Bitcoin wallets has dropped by roughly 108,700 since October 16, according to Santiment. At the same time, addresses classified as smart money have accumulated more than 14,200 BTC over the last fortnight.

This divergence occurs with bitcoin trading at $74,507, a decline of 9.86% compared with a month earlier, BeInCrypto Markets data shows. The current price is under the approximately $75,700 average purchase price of recent buyers.

Retail Participants Exit as Bitcoin Dips Under $75,000

On October 16, Santiment recorded 59.99 million non-empty bitcoin wallets, barely below the 60 million mark. As the price dropped, that number has declined.

A lower wallet count does not always translate to fewer investors, Santiment noted. Extended downturns often cause small-scale traders to consolidate or empty their wallets.

“That type of retail capitulation has historically been a necessary ingredient before many major crypto recoveries,” the post read.

In contrast, addresses that hold between 1 and 10 BTC accumulated an additional 10,076 BTC over a two-week period. The cohort with 10 to 100 BTC added a further 4,131 BTC, according to Santiment data.

However, their purchases face an even bigger source of selling: Wall Street spot bitcoin funds.

Institutional Funds Sell While Smart Money Accumulates

Spot bitcoin ETFs have been heading in the opposite direction. Over the seven trading days starting October 30, they saw net outflows of $2.13 billion, according to SoSoValue data.

Six of those days recorded withdrawals, with October 30 alone seeing $643.3 million leave the funds. That marked the biggest single-day outflow since June 25.

At today's prices, the 14,200 BTC accumulated by smart money addresses is valued at around $1.06 billion. ETF outflows have been roughly twice that amount.

Will Bitcoin Maintain $75,000 After $79,000 Failed?

For Santiment's optimistic scenario to play out, bitcoin must hold the $74,000–$75,000 range while wallet numbers continue to decline. The firm said that a recovery to $78,000–$80,000 would reinforce the case.

“Exchange supply is also down near 1.28M BTC, so a reclaim of $78K to $80K alongside continued retail capitulation would strengthen the case that sellers are becoming exhausted at the perfect time that savvy traders are accumulating,” it added.

This test comes after a previous failure. In October, the firm had linked its bottom signal to $79,000, and the bitcoin price broke below that level within days.

Downside risk remains nearby, as bitcoin briefly hit $73,708 on November 8, its weakest level since August.

According to Santiment, the signal loses strength if the price falls below recent troughs and smart money wallets begin offloading. Given that ETF outflows are roughly double the smart money buying, the $75,000 level may depend on whether institutional selling eases.