Data shows that private investors buy Bitcoin, sell whales

Bitcoin (BTC) rebounded impressively after falling to its three-month low of $ 42,333 on December 4 and has since risen to $ 51,000.

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

“Bitcoin is still stuck in a situation where small addresses are willing to amass sats [la cuenta unitaria más pequeña de Bitcoin]while the whale addresses don’t really pile up, ” pointed out the newsletter focused on cryptocurrencies after evaluating the change in bitcoin amounts in small and affluent wallet groups, as shown in the graphic below.

Bitcoin on chain data with fish and whale BTC wallet pools. Source: Ecoinometry
Data shows that private investors buy Bitcoin, sell whales
Data shows that private investors buy Bitcoin, sell whales

Ecoinometrics further noted that the situation for Bitcoin is “not ideal,” suggesting that in the absence of influential buyers, BTC’s price could continue to decline.

Bitcoin’s downside target is near $ 42,000

Ecoinometrics’ declining outlook appeared as Bitcoin on Wednesday grappled with the Federal Reserve’s policy decision to cut its bond purchases by $ 30 billion each month, with a complete reversal in April next year.

The $ 120 billion monthly stimulus plan was instrumental in pushing the price of BTC down from less than $ 4,000 in March 2020 to $ 69,000 in November 2021. And now, with liquidity looming and borrowing more expensive as the Fed prepares for three rate hikes over the next year, many fear it will hurt investors’ appetites for risky assets like Bitcoin.

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

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

“So much money is being spilled into the room that it doesn’t make sense for cryptocurrency prices to drop well below it. It feels painful when you have a lot of time, but it’s probably healthy. “

Daily price chart of the BTC / USD pair with support at 40,000-42,000 USD. Source: TradingView

Bitcoin accumulation is greatest among retailers

In reality, unique wallets of more than 1000 BTC are in decline in 2021, and data from Glassnode shows that their number has dropped from 2,475 to 2,147 since February 9.

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

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

in the meantime, Addresses with at least 0.1 BTC (~ 4,855) rose from 3.12 million to 3.30 million over the same period, suggesting that “fish” played a key role in pushing the price of Bitcoin up from around 30,000 $ 69,000 drift year.

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

Further evidence that retail investors were optimistic about Bitcoin comes from addresses with at least 1 BTC.

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

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 increase during the BTC price correction from USD 69,000 to USD 42,333 in the November-December session, indicating an accumulation. It hit a seven-month high on Wednesday as Bitcoin rebounded from its weekly low of $ 46,000 to $ 50,000.

O-chain analyst Willy Woo also saw retail accumulation spike to levels following the March 2020 crash, leading to Bitcoin’s two-year bull run.

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

Additionally, the Bitcoin Momentum indicator, which preceded its $ 69,000 breakout earlier this year, also suggests a possible future BTC price collapse.

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Every movement of investment and trade carries a risk, you must conduct your own investigation when making a decision.

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