While the price of Bitcoin has fallen below the $20,000 psychological support after 12 days, on-chain data shows that whales have behaved against retail investors since late August (early September). In fact, it seems that the whales have not yet bought into the bullish sentiment of retail investors regarding the future course of the market.
To Report Crypto Slate, retail investors (with balances of less than one bitcoin) are piling in, while whales with more than 10,000 bitcoins are selling their holdings.
As you can see in the chart below, the lighter colors indicate that Bitcoin was in the distribution (selling) phase in August. Darker colors, which indicate periods of accumulation, are seen in the months of May, June and July (May, June and July). This chart shows the Bitcoin accumulation trend score among all investors.
During the market crash in May that began with the collapse of the Terra network, investors continued to accumulate Bitcoin. However, this trend ended in August when market sentiment turned negative, causing the price of Bitcoin to remain roughly flat during the third quarter of 2022. Although sellers outnumbered buyers during this period, the force apparently wasn’t enough to keep Bitcoin below $18,000 for an extended period.
Holding the price of Bitcoin in the $20,000 range during the third quarter in the midst of relentless selling pressure indicates strong support at this level. Since the middle of August (late August), Bitcoin has experienced a market range and has been traded in the range of $18,000 to $22,000.
Examining the status of holders by their wallet’s Bitcoin balance provides a more detailed insight into this trend. Investors with less than one bitcoin in balance entered the accumulation phase again in late October (early November); Similar to investors who hold between 1,000 and 10,000 bitcoins. Addresses holding more than 10,000 bitcoins also continued to sell as they had started in mid-July (late July).
The chart below provides a clear picture of the different trends among different groups of Bitcoin investors. Investors holding less than one bitcoin have historically been buying at different times than larger whales.
Retail investors were heavily buying Bitcoin in March, while whales began selling around the same period. June and July this year was the only period where there were obvious similarities between the behavior of retail investors and whales.
While Bitcoin whales may continue to distribute their holdings through continued selling, recent weeks have seen signs of that trend changing. The Whale Accumulation Trend Score has changed from the dark red zone (oversold) to light orange since mid-August (late August), indicating a more neutral stance.
Given the very low volatility of the Bitcoin price since the summer, both whales and retail investors who bought Bitcoin in June and July are likely either in profit or close to their purchase price.
Although larger whales continue to sell, investors with 1,000 to 10,000 bitcoins have also started to accumulate since the end of October (early November).