Large Bitcoin holders accumulated 19,610 BTC over several days while smaller investors reduced their positions, according to on-chain data from Santiment. The divergence in wallet activity emerged amid concerns over a reported Coldcard firmware security flaw that has shaken retail confidence. The dynamic — larger wallets absorbing coins divested by smaller holders during periods of stress — has been observed in prior Bitcoin market cycles and is closely tracked by analysts as an indicator of shifting conviction across investor cohorts.

Santiment reported that wallets holding between 10 and 10,000 BTC increased their combined holdings by 0.14% starting July 29. During the same period, wallets holding less than 0.01 BTC reduced their balances by 0.55%.

Coldcard Security Concerns Trigger Retail Sell-Off

The shift in holder behavior followed reports of a firmware entropy flaw affecting Coldcard hardware wallets, a product line manufactured by Coinkite. Estimated losses tied to the vulnerability have surpassed 1,360 BTC, valued at approximately $87 million. Hardware wallet vulnerabilities are particularly sensitive for the crypto ecosystem because these devices are marketed as a gold standard for self-custody, and incidents involving them can reverberate beyond the directly affected users.

Santiment emphasized that the accumulation was distributed across the broader cohort of wallets in the 10 to 10,000 BTC range, rather than concentrated in a single compromised address. According to the analytics platform, large-scale players absorbed the coins being sold off as retail investors lost confidence. The security concerns reportedly extended well beyond those directly affected by the flaw.

Short-term holders added further selling pressure near the lower boundary of Bitcoin's trading range. A CryptoQuant chart shared by market analyst Whale Factor showed that 32,000 BTC were deposited onto exchanges in a single day at a loss — the largest short-term holder capitulation recorded in 30 days.

🐋 WHALE WATCH : 32000 $BTC hit exchanges at a loss in a single day. Short term holders largest capitulation in 30 days. Someone bought high held through the dip and sold the local bottom to fund your spot bag. Liquidity collected. Next move loading. pic.twitter.com/0h6VuPL9UQ — Whale Factor (@WhaleFactor) August 3, 2026

While exchange deposits do not necessarily indicate that all deposited coins are being sold, such transactions may reflect defensive repositioning and capitulation as the market tests key support levels.

Glassnode Data Shows Declining Profitability

Glassnode recorded a decline in overall market profitability. The percentage of Bitcoin's supply held in profit positions is approaching a cyclical low as stop-loss orders are triggered across the market.

Glassnode also noted that the ratio of supply held by short-term investors relative to long-term investors remains near historic lows, suggesting a continuing transfer of coins from newer market participants to longer-term holders. This metric is widely followed as a structural indicator: when short-term holder supply shrinks materially, it often reflects that newer entrants have exited and the remaining holder base skews toward those with longer time horizons.

Price Levels and Liquidity Clusters

Analyst Daan Crypto Trades observed that Bitcoin has moved into the upper portion of its trend line and retraced to its weekly 200-period moving average, where it has been trading with irregular volatility. The 200-period moving average is commonly used by technical analysts as a longer-term trend reference point. A sustained advance, according to the analysis, would require a confirmed breakout from the falling wedge formation. A mere spike above the trend line would not be sufficient on its own.

CoinGlass data identifies two notable clusters of leveraged positions near Bitcoin's current price. The nearest upside cluster sits in the $63,800–$64,100 range. Bitcoin's bounce to $63,900 placed the price within this liquidity zone, and a further extension could trigger forced closures of leveraged short positions, potentially fueling additional gains.

Additional liquidity is concentrated at $64,300, with smaller clusters at $64,800 and $65,000. A decisive move above $64,100 could direct the price toward those levels, though limited spot demand may constrain the magnitude of any short squeeze.

On the downside, the most significant cluster of leveraged positions lies between $61,900 and $62,200, positioned below the most recent local low. This zone could attract price action if the current rally loses momentum. A decline below $62,000 would target the June–July low of $57,820.