On-chain data shows the Bitcoin retail investors have been selling off their holdings recently, while the large entities have been accumulating.
Bearish Bitcoin Price Action Has Shaken Out Small Investors
In a new post on X, the on-chain analytics firm Santiment has talked about how the different segments of the Bitcoin market have reacted to the recent period of volatility in the asset’s price.
The on-chain indicator of relevance here is the “Supply Distribution,” which tells us, among other things, the number of addresses that belong to any given wallet group.
Addresses or investors are divided into these cohorts based on the total amount of BTC that they are carrying in their balance. The 1 to 10 coins group, for instance, contains the holders who own between 1 and 10 BTC.
In the context of the current topic, two broad wallet ranges are of interest: 0 to 100 coins and 100+ coins. At the current exchange rate, 100 BTC converts to $9.8 million, so the only investors who would qualify for the latter of the two would be the large traders.
These humongous investors are collectively known as the sharks and whales. The 0 to 100 coins group, on the other hand, includes the small hands of the sector, like the retail investors.
Now, here is the chart shared by the analytics firm that shows the trend in the Bitcoin Supply Distribution for these two wallet ranges over the last few months:
Looks like the two metrics have seen their values go opposite ways in recent weeks | Source: Santiment on X
As displayed in the above graph, the Supply Distribution has witnessed a change for both of these cohorts as the cryptocurrency’s price has gone through its recent rollercoaster.
Interestingly, the trajectory in the indicator hasn’t been a uniform one between the two. In fact, the trend has been the exact opposite between small and large investors.
“Overall, February has seen a growth of 135 more 100+ BTC wallets and a plummet of 138,680 <100 wallets,” notes Santiment. Some of the drop in the retail investors would naturally be because of the fact that some of them accumulated enough to be promoted into the 100+ coins category. That said, the shark and whale increase of just 135 wallets certainly doesn’t explain away the massive 138,680 drop in retail wallets.
As such, it would appear that a large amount of small-sized entities have exited the network during the last few days. “This is an ideal setup for crypto market caps to rise, even if it takes a few more weeks (or even months) to see the generally bullish impact of coins being absorbed by whales,” says the analytics firm.
BTC Price
Bitcoin has been unable to make full recovery from the crash that took place earlier in the month as its price is still trading around $98,600.
The price of the coin seems to have gone through volatility in both directions recently | Source: BTCUSDT on TradingView