So the number of possible addresses is reduced using bech32?
No.
The old P2PKH addresses that started with a 1 were typically 34 characters long.
The new bech32 addresses are typically 42 characters long.
Also...
The first character of the old addresses indicated the address type, and the last 6 characters were part of the checksum, leaving approximately 27 characters of base
58 key hash data. This leaves enough room for more than:
1.46 × 10
48 possible addresses
With a bech32 P2WPKH address, the first 3 characters indicate the address type, and the last 6 characters are the checksum, leaving 33 characters of base32 key hash data. This leaves enough room for more than:
1.46 × 10
48 possible addresses
Since the public key hash is only a 160 bit value, there are only 1.46 × 10
48 possible addresses. Therefore, BOTH address formats have enough room for ALL possible currently valid addresses.