Fish food? Data shows retail investors buy Bitcoin, whales sell

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

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

“Bitcoin is still stuck in a situation where small addresses are ready to stack sats [the smallest unit account of Bitcoin], while the addresses of the whales don’t really pile up, ”the crypto-focused newsletter noted after assessing the evolution of Bitcoin amounts in small and wealthy wallet groups, as seen in the graph below.

Data on the Bitcoin chain containing clusters of fish and whale BTC wallets. Source: Ecoinometry

Ecoinometrics further claimed that the situation for Bitcoin is “not ideal”, suggesting that the price of BTC may eventually resume declining in the absence of influential buyers.

Bitcoin’s downside target is near $ 42,000

The bearish outlook for Ecoinometrics emerged as Bitcoin grappled with the Federal Reserve’s policy decision on Wednesday to cut its bond purchases by $ 30 billion each month and unwind them entirely by April next year. .

The $ 120 billion per month stimulus package helped push the price of BTC from less than $ 4,000 in March 2020 to $ 69,000 in November 2021. And now that liquidity is threatening to wane, loans are growing more costly as the Fed prepares for three next rate hikes. year, many fear this could hurt investor appetites for risky assets like Bitcoin.

The price of bitcoin briefly exceeded $ 49,000 after the Fed’s FOMC meeting confirmed at least three interest rate hikes and some adjustments to current market support practices in 2022. https://t.co / TpTX7tGmYL pic.twitter.com/lXw47icZmB

– Cointelegraph Markets (@CointelegraphMT) December 15, 2021

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

“$ 42,000 is at a pretty significant level, and the 40-year-old should hold up,” the crypto billionaire told Bloomberg TV on Tuesday in an interview, adding:

“So much money is pouring into space, it wouldn’t make sense for crypto prices to drop much below. If you’re long, it hurts, but it’s probably healthy.” -42K supported. Source: TradingViewBitcoin higher accumulation at retailers

In fact, single wallets holding 1,000 BTC or more have declined throughout 2021, with data from Glassnode showing that their number has fallen to 2,147 from 2,475 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 containing at least 0.01 BTC (around $ 485 at current exchange rates) increased in 2021, from 8.46 million to 9.39 million year-to-date.

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

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

Another piece of evidence showing that retail investors have been bullish on Bitcoin comes from addresses that hold at least 1 BTC.

Related: Analysts Expect Bitcoin Trend Change After Fed Introduces 2022 Roadmap

The quantity of these wallets declined in the first half of 2021 as the BTC market grappled with the China ban and other negative news, but began to increase in the second half as El Salvador adopted Bitcoin as its legal tender.

The 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 $ 69,000 to $ 42,333 during the November-December session, signaling a build-up. It hit a seven-month high on Wednesday just as Bitcoin rebounded to $ 50,000 from its weekly low of nearly $ 46,000.

Channel analyst Willy Woo also spotted retail build-up reaching levels seen after the March 2020 crash, which led to Bitcoin’s two-year bull run.

Accumulation among wallets holding less than 1 BTC. Source: Willy Woo

Additionally, Bitcoin’s momentum indicator that preceded its price break at $ 69,000 earlier this year also hints at a possible upcoming BTC price break.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.

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