Bitcoin has seen a remarkable $20,000 increase over the past week, with data revealing who’s driving this rally. The blockchain data shows smaller investors continue to increase their Bitcoin holdings, while large holders—known as whales—are sticking to a strategy of selling into the strength of the price surge.
Bitcoin (BTC), the largest cryptocurrency by market cap, nearly reached $90,000 early Tuesday before stabilizing near $87,400. At the time of writing, this marks a 27% rise over the past seven days, according to CoinDesk data.
A broad view of the market reveals that much of the recent buying pressure has come from activity on the U.S.-based Coinbase exchange, often considered a strong indicator of institutional interest. However, a closer look at the data shows that retail investors—specifically “shrimp” addresses holding less than one BTC—are steadily accumulating more Bitcoin amid the price rally.
Small Investors: The New Market Movers
Glassnode’s data breaks down Bitcoin holders by cohort, from small investors, or “shrimps” with less than one BTC, to “humpback whales” with over 10,000 BTC. A value closer to one indicates accumulation within a cohort, while a value near zero indicates selling or distribution.
All cohorts except humpback whales have been in accumulation mode for the last two months. This trend has aligned with Bitcoin’s price increase from around $55,000 in September to just shy of $90,000 in November.
This challenges the conventional wisdom that large investors or whales are the most strategic players. The data indicates that whales are actually selling amid rising prices, while retail investors are buying into the upward momentum. As CoinDesk research notes, retail investors may now be emerging as the “smart money” in the Bitcoin ecosystem.
Supply Shortages as Demand Outpaces Issuance
Aggregating data from all cohorts, including miners, exchanges, and retail investors, reveals that 26,000 BTC have been accumulated over the past month. Notably, this accumulation trend has been steady over the last three months, showing that demand has outstripped supply and issuance since September.
Comparing Long-Term and Short-Term Holders
Glassnode defines long-term holders (LTHs) as those holding Bitcoin for more than 155 days. Historically, these holders sell into price strength, such as during Bitcoin’s all-time highs in 2017 and 2021, and tend to accumulate during market lows.
This time, however, long-term holders appear to be holding onto their Bitcoin, which could indicate strong bullish expectations. Currently, LTHs control 78% of the circulating Bitcoin supply, or around 15 million coins. Over the past month, they’ve reduced their holdings by only 3%, a stark contrast to the 20% reduction seen in prior bull markets.
Short-term holders (STHs), or those who’ve held Bitcoin for less than 155 days, tend to buy into market rallies, such as Monday’s 10% price jump. Their holdings are near historical lows, with only a brief increase. In past bull runs, STHs have held as much as 35% to 50% of Bitcoin’s supply.
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