An army of small Bitcoin (BTC) investors has been fighting with their larger counterparts for months to keep the price above $18,000.
Bitcoin accumulation strong among fishes
Notably, there has been some on-chain divergence between so-called whales (entities that hold more than 1,000 BTC) and fishes (entities that hold relatively smaller amounts of BTC) as Bitcoin continues to fluctuate inside the $18,000-$20,000 area.
Bitcoin fishes have been accumulating BTC during the coin’s sideways trend. For instance, the net Bitcoin supply held by addresses with 100-1,000 BTC balance has increased from 3.71 million in June to 3.77 million in October, according to data provided by Glassnode.
Bitcoin supply held by entities with 100-1K BTC balance. Source: Glassnode
Similarly, the supply of Bitcoin held by addresses with a 10-100 BTC balance has also risen from 3 million to 3.15 million in the same period. The trend is similar across the entities holding anything between 0.001 and 10 BTC.
Meanwhile, the same period of Bitcoin’s sideways price action has coincided with a decline in BTC supply held by whales. For instance, the Bitcoin supply held by the 1,000-10,000 BTC cohort has dropped from 3.82 million to 3.69 million since June.
Bitcoin supply held by entities with balance 1K-10K BTC. Source: Glassnode
Additionally, the 10,000-100,000 BTC cohort has decreased its Bitcoin holdings from 1.98 million to 1.92 million in the same timeframe.
A basic interpretation of the on-chain data mentioned above is that fishes are more confident than whales about a potential Bitcoin price bottom near $18,000.
But while these small investors may have been absorbing massive selling pressure created by larger investors, the downside risk is historically greater with a decreasing whale population, as shown below.
Number of Bitcoin whales vs. BTC price. Source: Glassnode
Interestingly, one of the few exceptions is when Bitcoin’s reached its all-time high price of $69,000 while the number of whales remained relatively flat. This may suggest that whales are having less influence on the market…