Data Shows Retail Investors Are Buying Bitcoin, Whales Are Selling

Bitcoin (BTC) made an impressive rally after falling to its three-month low of $ 42,333 on December 4, rising as high as $ 51,000 since then.

The BTC price retracement arose mainly due to increased buying activity among addresses that have less than 1 BTC. In contrast, Bitcoin wallets with balances between 1,000 BTC and 10,000 BTC did little to support the bullish move, data collected by Ecoinometrics showed.

“Bitcoin is still stuck in a situation where small addresses are willing to stack sats [la cuenta unitaria más pequeña de Bitcoin]while whale addresses aren’t really piling up, ” he pointed the cryptocurrency-focused newsletter after assessing the change in Bitcoin amounts in small, wealthy wallet pools, as shown in the graph below.

Bitcoin on-chain data with fish and whale BTC wallet pools. Source: Ecoinometrics

Ecoinometrics further claimed that the situation for Bitcoin is “not ideal”, suggesting that the price of BTC may end up resuming its decline in the absence of influential buyers.

Bitcoin’s downside target is near $ 42,000

The bearish outlook from Ecoinometrics appeared as Bitcoin grappled with the Federal Reserve’s political decision on Wednesday to cut its bond purchases by $ 30 billion each month to completely undo them in April of next year.

The stimulus program of USD 120 billion a month was instrumental in sending the price of BTC from less than USD 4,000 in March 2020 to USD 69,000 in November 2021. And now that liquidity threatens to disappear, loans become more Costly As the Fed prepares for three rate hikes next year, many fear it will hurt investors’ appetite for risky assets like Bitcoin.

Mike Novogratz, CEO of Galaxy Digital Holdings, admitted that Bitcoin could feel “pain ahead”, but anticipated that its price would not drop beyond the support of $ 42,000.

“U {SD 42,000 is at quite a significant level, and 40,000 should be maintained”, the crypto billionaire told Bloomberg TV in an interview Tuesday, adding:

“So much money is being poured into the space, it wouldn’t make sense for cryptocurrency prices to fall far below that. If you have a lot of time, it feels painful, but it’s probably healthy.”

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Daily price chart of the BTC / USD pair showing support at $ 40K-42K. Source: TradingView

Bitcoin accumulation is strongest among retailers

In reality, unique wallets that hold 1000+ BTC or more have been declining throughout 2021, and Glassnode data shows that their number has dropped from 2,475 to 2,147 since February 9.

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The total number of Bitcoin addresses with a balance of at least 1000 BTC. Source: Glassnode

In contrast, the number of unique wallets holding at least 0.01 BTC (about $ 485 at the current exchange rate) increased in 2021, from 8.46 million to 9.39 million so far this year.

Meanwhile, addresses holding at least 0.1 BTC (~ $ 4,855) increased from 3.12 million to 3.30 million in the same period, indicating that “fish” played a key role in pumping Bitcoin’s price from around $ 30,000. to as high as $ 69,000 this year.

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The total number of Bitcoin addresses with at least 0.01 BTC and 0.1 BTC balance. Source: Glassnode

One more piece of evidence showing that retail investors have been bullish on Bitcoin, it came from addresses that have at least 1 BTC.

These wallets declined in number in the first half of 2021 as the BTC market grappled with China’s ban and other negative news, but began to rise in the second half when El Salvador adopted Bitcoin as legal tender.

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Total number of Bitcoin addresses with at least 1 BTC balance. Source: Glassnode

The number of Bitcoin wallets with at least 1 BTC also continued to rise during the BTC price correction from $ 69,000 to $ 42,333 in the November-December session, indicating accumulation. It hit a seven-month high on Wednesday just as Bitcoin bounced to $ 50,000 from its weekly low near $ 46,000.

O-chain analyst Willy Woo also saw retail accumulation rise to levels seen after the March 2020 crash, which led to Bitcoin’s two-year bull run.

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Accumulation between wallets with less than 1 BTC. Source: WIlly Woo

Furthermore, the Bitcoin momentum indicator that preceded its price break to $ 69,000 earlier this year also points to a possible BTC price break down in the future.

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Data Shows Retail Investors Are Buying Bitcoin, Whales Are Selling

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