In late February 2026, Beijing time, the Bitcoin market is in an awkward zone of mixed signals: on one hand, on-chain data shows a continuous increase in large wallet holdings, while liquidity models indicate that both spot and futures are biased to the downside. Analysts, institutional traders, and early holders have significant disagreements on the question of whether "selling pressure has been fully released." In particular, the changes in holding structure disclosed by Santiment create a stark contrast with the weak liquidity and trading performance on the market. The increasing number of wallets and apparent shifting of chips happen in the background, while prices have yet to indicate a unilateral direction. This contradiction of "on-chain optimism vs market indifference" will run throughout the following sections.
Large Wallets Approaching Twenty Thousand: Who Holds the Chips?
● Wallet Count Breakthrough: According to Santiment data, the number of wallets holding more than 100 BTC increased to 19,993 during the period from February 25 to 27, 2026, nearing the integer milestone of 20,000. In terms of on-chain structure, this means that the group of addresses controlling a significant amount of Bitcoin is expanding, no longer limited to a very small number of "super whales." Such data is typically interpreted as "more mid-to-large players entering the market," but it may also involve factors like the splitting of old addresses, new addresses taking over, and adjustments in custodial structures.
● "Chip Diversification" vs Traditional Perception Discrepancy: Santiment interprets the rising number of large holding wallets as chips being "diversified" — spreading from a few extremely concentrated whales to a larger number of significant holders. Traditional technical analysts are more accustomed to viewing risk in terms of "concentration," believing that an increase in large chips is inherently concentrated. However, from the current data perspective, a more precise statement would be: extreme concentration is shifting to multi-point concentration, where chips migrate from a super single point to a multi-node distribution, which is not the same as classic "widely distributed retail investors."
● Potential Impact on Selling Pressure and Elasticity: The increase in large wallets may, on one hand, reduce the instantaneous destructive power of a "single whale dumping" on prices in the short term, as market shocks are absorbed by multiple entities. On the other hand, it also implies that above critical thresholds, potential collective actions for reducing positions and locking in profits may become denser, forming a broader, thicker hedging and selling pressure band. This could cause prices to behave more "bluntly" in certain areas, reducing elasticity and converging daily volatility, but once the multi-point chips form consistent expectations, trends may become more decisive.
● Indicator Limitations and Boundaries: It should be emphasized that such on-chain indicators only reveal "who is holding" and "how chips are distributed," without providing a necessary answer for future price direction. The increase in major holders can correspond to passive accumulation from a long-term bullish perspective or could be concentration management in preparation for potential structural reductions. In the absence of factors such as cost of funds, risk preferences, and trading strategies, directly extrapolating changes in wallet numbers to price fluctuations constitutes an overreach of methodology.
Liquidity Bearishness vs On-chain Optimism's Direct Conflict
● Single Source "Liquidity Bearish" Viewpoint: Analyst Willy Woo mentioned in a market commentary in late February that both Bitcoin spot and futures liquidity are bearish, indicating insufficient depth of active buying and limited absorption of passive orders, with trend-based funds reluctant to enter the market significantly at current price ranges. It needs to be clarified that this judgment currently primarily comes from a single analysis source, more so a subjective view of the order book and derivatives position structure rather than a market consensus indicator.
● The Apparent Contradiction of Increasing Wallets vs Bearish Liquidity: On one hand, we have "the chips are increasing," represented by 19,993 wallets holding over 100 BTC, while on the other hand, we see a contraction in trading depth and activity. The two are not necessarily contradictory: chips can be "locked" on-chain without translating into liquidity on the order book; the growth in addresses may also come from over-the-counter transfers or restructuring custody, rather than new funds entering the market en masse via public purchasing. In other words, the "optimism" in on-chain structure can long coexist with the "conservatism" of market liquidity.
● Cautious Reference to "OG Selling > New Funds Inflow": There is a prevailing market belief that the selling scale of older holders (OGs) has exceeded new fund inflows, leading to difficulties in price upward movement. Based on the current public information, this conclusion remains to be verified, lacking unified data support. It can be used as a description of sentiment but should not be regarded as an established fact, nor should it form the basis for constructing an "inevitable selling pressure rule" or precise cyclical model.
● How to Interpret Conflict Signals When Price Predictions Are Prohibited: Given the prohibition on making concrete predictions about Bitcoin's future price and bear market timeline, the conflict of "on-chain optimism vs liquidity bearishness" is more suited to serve as a basis for scenario forecasting: one scenario is that chips continue to settle on-chain, liquidity gradually recovers, and prices digest selling pressure over time rather than through volatile fluctuations; another scenario is that when macroeconomic and industry noise intertwines, weak liquidity may instead amplify daily volatility. What investors can do is not to forecast "inevitable outcomes," but to identify their tolerance and position strategies in different scenarios.
Wall Street Layoffs Lead to Stock Price Gains Amid Signals of Infrastructure Contraction
● Block Stock Price Surge After Layoffs: Payment and crypto-related company Block announced large-scale layoffs at the beginning of 2026, cutting operating costs and investments in non-core businesses. However, in the market performance during late February in the East 8 time zone, Block's stock price rose instead of fell, reflecting traditional capital markets' positive pricing on "improving capital efficiency" and "contracting lines." Behind this response is that investors are more willing to pay a premium for stories with predictable cash flows and controllable costs, rather than for unlimited expansion promises.
● The Symbolic Significance of Colony's Shutdown: In contrast, the Avalanche ecosystem fund Colony announced it would cease operations by the end of Q1 2026. Once viewed as an "ecosystem accelerator," the specialized fund struggles to maintain high-intensity cash burn and long-term lock-in during a new round of risk preference contraction. Its exit is not just a failure of a single project, but symbolizes a loss of patience and credit endorsement from the capital market for the previous model of "building ecosystems with large funds."
● The Divergent Paths of Traditional Finance and Crypto Infrastructure: One path sees listed companies gaining stock returns through layoffs and focusing on core operations, while the other sees ecosystem funds quietly shutting down amid capital chills, outlining vastly different developmental paths. Traditional finance, under high-interest rates and regulatory constraints, is forced to pursue "light assets and high turnover," while some crypto infrastructure remains stuck in the old paradigm of "heavy funds + high subsidies." From a funding preference perspective, risk capital is shifting from heavily invested, difficult-to-value ecological games to assets and business models that can clearly measure cost-benefit and hedge risk.
● Institutional Preference Shifts: In this environment, institutions prefer to engage in crypto through light assets and controllable costs, such as custody, settlement, data services, and liquidity market-making, rather than committing to large-scale ecosystem funds with ten-year returns. Colony's exit, alongside Block's "slimming down" to win capital applause, points to the same conclusion: whether on-chain or off-chain, the bargaining power of heavy asset, high cash burn models is declining. Fine-tuned participation utilizing existing infrastructure and data advantages is more aligned with current risk-reward preferences.
Data Integrated into Bloomberg Terminal: Crypto Becomes "Visible" Afterward
● Bloomberg and Kaiko's Data Integration: In late February, Bloomberg continued advancing its cooperation with on-chain and trading data provider Kaiko to directly embed exchange depth, trading volume, and some on-chain indicators into the traditional Bloomberg terminal. This means that institutional traders, who are used to processing forex, interest rates, credit, and stock data on one screen, can now also view crypto-related data on the same interface, transforming crypto assets from "marginal labels" to a class of assets that can be monitored and analyzed uniformly.
● Institutional Data and Settlement Network: Concurrently, there are distributed data and settlement solutions aimed at institutions, such as Canton Network, attempting to provide on-chain asset registration, settlement, and inter-institutional collaboration capabilities within a compliance framework. This layer of "compliant visible data" bridges traditional finance's reconciliation and clearing habits with the real-time traceability of the crypto world, providing infrastructure support for large institutions’ allocations, custody, and risk control.
● Enhancing Visibility and Pricing Capability: When on-chain and trading data enters institutional terminals via standardized interfaces, the most significant change is the enhancement of visibility and pricing capability. Longer historical data and more granular trading and depth information enable quantitative models and risk budgeting tools to systematically incorporate Bitcoin into multi-asset portfolio frameworks. This does not automatically lead to buying pressure but reduces research costs and decision friction, making the path of "research—testing—scaling" feasible instead of relying on the ad hoc decisions of a few high-risk preference teams.
● Cyclical Volatility May Be Amplified: However, the improvement of data infrastructure does not equate to "good news = price increase." As more institutions view Bitcoin through a consistent data set and similar models, price behavior may exhibit more procyclical characteristics: during periods of rising risk appetite, models simultaneously raise weights, amplifying allocations; during periods of rising pressure, risk control models tighten, reinforcing selling and reduction rhythms. Increased visibility and enriched liquidity tools may sometimes make price movements resemble traditional risky assets rather than an "independent market," potentially making price cycles more intense.
From STG to ZRO: The Next Round of Token Design Experiment
● LayerZero Burns 303 Million STG and Renames: Cross-chain messaging protocol LayerZero announced in late February the burning of 303 million STG tokens and pushed to rename the token system from STG to ZRO. The official statement emphasizes that this operation aims to simplify the token layer structure, reduce historical burdens, and provide a clearer pricing unit for subsequent governance and incentive mechanisms. The large-scale burn coupled with the rebranding is, in itself, a high-profile experiment of restarting the token layer.
● Triple Reconstruction of Supply, Brand, and Governance: From the supply side, the burning of 303 million STG directly reduces circulation and potential selling pressure, allowing for narrative space for ZRO as the "new protagonist"; from the brand perspective, abandoning the old ticker and adopting a new symbol seeks to sever early market memories and negative price perceptions; at the governance level, redesigning voting, incentive, and protocol revenue distribution logic hopes to align the interests of long-term participants with the core development team using a clearer structure of rights and responsibilities.
● Contrast with ROBO Airdrop: During the same period, the ROBO token opened for claims, continuing to distribute via the "airdrop + community participation" path, binding user behavior, contribution, and initial chip allocation together. Compared to LayerZero's "burning + renaming + restructuring," ROBO is more like fine-tuning parameters within an existing paradigm: who gets the tokens, how much they get, and how unlocking schedules correlate with protocol usage. The two collectively form different samples of current industry solutions on the "distribution—incentive—governance" triangle.
● The Iteration of Token Economics Is a Game of Governance and Market: Whether it is the radical restart of STG to ZRO or the incentive optimization of ROBO, this round of adjustments to the token economic model is essentially a game between governance structure and market sentiment, rather than a simple technical version upgrade. The total amount, destruction, and release curve are only surface aspects; what is truly being tested is: who holds the discourse power, how to bind contributors, and how to maintain community and funding stickiness amid bull and bear transitions. The success or failure of these designs will ultimately feedback through price and liquidity, but the causal chain is complex and delayed, making it impossible to encapsulate with simple "positive/negative" labels.
Chip Concentration, Capital Differentiation: Is Bitcoin Selling Pressure Really Over?
On-chain data showing growth in large wallets, chip diversification mentioned by Santiment, and the liquidity bearishness described by Willy Woo jointly constitute a complex current situation: chips are being reallocated on-chain, but may not necessarily translate into market absorption and buying force. At the same time, the rise in Block's stock price post-layoffs, Colony's shutdown at the end of Q1, and the advancement of infrastructure like Bloomberg + Kaiko and Canton Network reveal the divergence in path choices between traditional capital and crypto infrastructure. Funds are no longer willing to pay for crude expansion, but prefer to bet on visible, calculable, and controllable risks in their participation.
In light of the clear prohibition against predicting Bitcoin's future price and bear market timelines, what we can do is scenario forecasting rather than concluding judgments: on one hand, chips may settle in a broader set of large addresses, with selling pressure being digested over a longer time frame; on the other hand, the advancement of institutional data infrastructure and token economic experiments may amplify volatility during sentiment transitions, making price behavior more aligned with the cyclical rhythms of traditional risk assets rather than walking independently as "digital gold." Whether selling pressure has truly ended depends more on how different types of capital re-engage under these new tools and rules.
Looking ahead to the coming months, three key clues need to be closely observed: first, the actual implementation speed and depth of use of institutional-level data and settlement infrastructures (such as Bloomberg terminal data access, Canton Network, etc.); second, the spillover effects in governance participation, liquidity, and long-term retention of new token economic model experiments represented by LayerZero and ROBO; third, the interaction between large on-chain wallets and exchange liquidity — whether chip distribution continues to be "multi-point concentrated," and when and how these chips will truly enter the order book. Only by observing these structural changes together can the answer to "whether selling pressure has been released" gradually manifest in the data.
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