Bitcoin (BTC) wholecoiner deposits to exchanges have fallen to levels not seen since 2018, signaling a structural shift in how large holders interact with the market.

The decline coincides with Donald Trump's latest signal about diplomatic coordination with China's President Xi Jinping over the Hormuz Strait, providing a geopolitical tailwind to an already tight supply situation.

Wholecoiner flows at levels not seen in years

Transactions where at least one whole BTC is sent to exchanges have dropped sharply. On the Binance exchange, the monthly average now stands at around 6000 BTC, well below the 15,400 BTC recorded in 2021.

At a global level, the picture is even clearer. The total number of transfers of at least one BTC to exchanges has fallen to around 27,500 BTC, down from 80,000 BTC at the peak in 2018.

Several factors explain this trend. Increased prices have made it increasingly difficult to hold one whole bitcoin, which over time reduces the group of wholecoiners.

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

An increasing share of owners also seems to prefer long-term strategies, further reducing activity on exchanges.

“This decline in active wholecoiners on exchanges reflects both reduced selling pressure and a gradual transformation of the market structure, where an increasing share of the supply is becoming increasingly illiquid,” wrote Darkfost on X.

Short-term traders are taking profits while short positions are increasing.

While long-term holders are retreating, short-term traders (STH) have moved aggressively in the opposite direction.

When BTC tested the $ 75,000 level, STH sent over 65,000 BTC to exchanges within 24 hours, of which 61,000 of these transfers were profitable.

Analyst Michaël van de Poppe pointed out that the derivatives market is facilitating a potential short squeeze. Funding rates have turned negative while open interest has increased, meaning traders are heavily over-leveraged in short positions while BTC tests resistance for the third time.

“…as long as BTC remains above $ 72K, I wouldn’t be worried, and I would rather look for long positions than shorts,” wrote the analyst.

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

On the other hand, on-chain analyst Axel Adler Jr. pointed out that Bitcoin's Bull-Bear Index has now passed above zero, thus leaving the bear zone.

However, he warned that the sentiment for profit and loss on the network remains negative, describing the current movement as an upswing, not the start of a new bull market.