Bitcoin’s decline may not be finished as whales continue selling into retail demand, signaling potential downside pressure.

A widening gap between large and small Bitcoin holders could signal that the market’s recent downturn is not over yet. Historically, this type of divergence has often preceded further declines, while sentiment indicators show growing anxiety among investors. The widely followed Crypto Fear and Greed Index dropped to 12 over the weekend, placing market sentiment deep in “extreme fear.”

According to on-chain analytics firm Santiment, large holders—commonly referred to as whales—were actively buying during last week’s panic. Wallets containing between 10 and 10,000 BTC accumulated significant amounts of bitcoin between Feb. 23 and March 3, when the cryptocurrency was trading in a range of roughly $62,900 to $69,600.

That period coincided with the steep sell-off linked to geopolitical tensions involving Iran and the early stages of the subsequent rebound. However, once bitcoin climbed to around $74,000 on Thursday, those same wallets began locking in gains. Since then, they have sold roughly two-thirds of the bitcoin they accumulated during the downturn.

At the same time, smaller investors have been moving in the opposite direction. Wallets holding less than 0.01 BTC have gradually increased their exposure as bitcoin slipped back below $70,000 heading into the weekend. Santiment noted that this pattern—retail investors buying while whales distribute holdings—has historically served as a bearish signal, suggesting that the market correction may not yet be complete.

Additional data from blockchain analytics firm Glassnode reinforces the fragile market structure. Roughly 43% of bitcoin’s circulating supply is currently at a loss. That dynamic creates persistent selling pressure during rallies, as investors who have been underwater for weeks or months use price rebounds as opportunities to exit at or near break-even.

This selling pressure became evident when bitcoin’s recovery stalled near $74,000. The rally ran into heavy supply from both whales taking profits and long-term holders looking to reduce losses.

The broader market picture reflects significant volatility without clear directional progress. Bitcoin traded near $60,000 on Feb. 6 and later climbed as high as $74,000 on March 5. Yet the asset is currently hovering around $68,000—roughly the same level it occupied several weeks ago.

Such price action highlights a market characterized by sharp swings but limited net movement. Each rally has tended to attract sellers eager to exit positions, while dips have drawn retail buyers hoping to capture a quick rebound.

Ultimately, this stalemate is likely to resolve in one of two ways. Either the available supply is gradually absorbed, allowing bitcoin to break decisively above $74,000, or buying momentum fades, leaving the market vulnerable to a deeper test of support near $60,000.

Recent whale behavior suggests that large holders may be positioning for the latter scenario.