Bitcoin faces downside risk as four wallets hold more than 100,000 BTC each amid weakening demand.

Investors are increasingly keeping Bitcoin [BTC] on exchanges, a behavioral shift that alters market structure and raises the risk of downside pressure. At the time of writing, BTC traded at $66,845, with current positioning suggesting vulnerability to further declines.

Over the past 24 hours, BTC recorded a modest gain of 0.42%. The narrow trading range has persisted for several days, reflecting a lack of strong momentum. Multiple indicators point to conditions that are not yet in place for a meaningful rally.

Large-holder accumulation shows signs of weakening

Data from Alphractal shows that only four wallet addresses currently hold more than 100,000 Bitcoin. These include two wallets linked to Binance, alongside those associated with Bitfinex and Robinhood.

Historically, market bottoms have been followed by robust rallies and new price highs, with an increase in the number of wallets holding more than 100,000 Bitcoin occurring during those periods. The years 2015, 2019, 2022, and 2024 saw the continuation of this trend.

Current stagnation in this metric suggests reduced accumulation among large holders. It indicates that major market participants are not aggressively increasing exposure, particularly through exchange-linked channels. This weakens demand strength and leaves Bitcoin more exposed to downside risk.

On-chain activity and exchange flows point to caution

On-chain activity, measured by the number of active addresses sending and receiving Bitcoin daily, has declined sharply. The drop reflects reduced network participation and lower transaction activity, signaling weakening demand. With fewer participants actively transacting, the network loses a source of organic support for price growth.

At the same time, exchange withdrawal transactions have fallen to one of their lowest levels in years, with just 908 addresses recorded. Under normal conditions, rising withdrawals indicate investors moving Bitcoin off exchanges into private wallets, which reduces immediate sell pressure.

Here, the trend is the opposite: fewer withdrawals suggest more Bitcoin remains on exchanges. That increases available supply and makes it easier for investors to sell on short notice. The buildup in exchange reserves adds fragility, and could accelerate downward moves if price volatility increases.

Derivatives market shows a thin, fragile bullish bias

The perpetual futures market also signals caution. Funding Rates remained slightly positive at 0.0037%, indicating long positions still outnumber shorts. However, the margin is thin, pointing to a fragile bullish bias rather than strong conviction.

Open Interest stood at $46.14 billion, down 0.87%. This decline suggests some traders are closing positions despite the slight dominance of longs, reflecting hesitation and a lack of confidence in near-term price direction.

Taken together, derivatives data aligns with the broader narrative from spot and on-chain metrics: market participants remain active, but conviction is weak and positioning remains cautious.

Summary

• Only four wallet addresses hold more than 100,000 Bitcoin, which could weigh on prospects for a sustained rally.
• Exchange-related behavior is increasing, with more Bitcoin remaining on exchanges rather than being withdrawn.
• Lower on-chain activity and reduced exchange withdrawals point to weaker demand and higher near-term supply availability.
• Perpetual funding remains slightly positive, but Open Interest is falling, reinforcing a cautious market stance.