Retail Investors Buy Bitcoin While Whales Sell

On-chain analysis shows retail buying accelerating as supply of whales shrinks.

The text below is from a recent edition of Deep Dive, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive this information and other on-chain bitcoin market analysis straight to your inbox, Subscribe now.

In today’s Daily Dive, we’ll cover some of the estimated accumulation and distribution trends from whales and retailers. There are many different ways to define what makes an entity a “retail business” or a “whale”.

In this analysis, we define retail as the supply of bitcoins held by entities with less than 10 BTC, i.e. looking at the behavior of any entity holding less than 10 BTC. We define whales as the bitcoin supply held by entities greater than 10 and less than 10,000 BTC. Glassnode’s data science heuristics help define and determine different entities.

What can be helpful is looking at the 30-day percent change in these groups to understand, at a high level, the rate at which retailer or whale groups are adding or selling bitcoin. The graph below shows the periods when the supply of the two groups increases, decreases or goes in opposite directions:

Source: Glassnode

Currently, we are seeing a strong acceleration in the retail buying trend over the past two months, while the supply of whales is decreasing slightly. The best sign (in blue) is to see both groups increase their bitcoin supply, signaling stronger demand. Typically, over the past year, there have been extended periods of retail adding bitcoin to local highs as whales sell out.

Although this is a smaller share of circulating supply, we are seeing one of the fastest accelerations in retail supply below 0.1 BTC that we have seen in recent years. years. Retail trade always tends to accumulate with few distribution periods.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.