On-chain data shows that retail-sized Bitcoin wallets are benefiting from large investors buying during the recent surge.
Bitcoin is observing the accumulation of sharks and whales
As on-chain analytics firm Santiment highlighted in an X post, Bitcoin investor behavior has recently split between the top and the bottom. The indicator of interest here is “supply distribution,” which tells us how much BTC is held by a specific group of wallets.
Addresses or investors are divided into these groups based on the number of coins they have in their balance. For example, the 1-10 coin group includes all holders who own 1-10 BTC.
In the context of the current topic, we focus on two investor ranges: 0-0.01 BTC and 10-10,000 BTC. The former correspond to the smallest retail traders in the network, while the latter include larger entities such as sharks and whales.
Below is a chart shared by Santiment that shows the Bitcoin supply distribution trends in these two ranges over the past month.
The two metrics appear to have diverged in recent days | Source: Santiment on X
As can be seen in the graph, Bitcoin retail holdings were accumulating in late April, while shark and whale holdings were stagnant. But the trend has changed since early May. While retail investors are selling, large holders are expanding their wallets instead.
More specifically, the 10-10,000 BTC group accumulated 16,622 tokens in the first few days of May, representing a 0.12% increase in total holdings. At the same time, the retailer instead sold 28 BTC, reflecting a 0.05% decrease in the cohort’s supply.
Interestingly, opposing supply trajectories for the two groups emerged as cryptocurrency prices surged. Historically, this type of opposing action between small and large companies has actually tended to be an ideal bullish combo. Santiment explained:
Historically, the strongest bull markets in cryptocurrency occur when smart money adds more coins to their wallets while smaller wallets disappear. The sample size for May is short, but so far it is moving in the right direction to justify further price increases across cryptocurrencies.
Now it remains to be seen whether the gap between high-net-worth investors and the retail crowd will continue in the future and, if so, whether this could further advance the rally.
BTC price
Bitcoin was close to the $83,000 level during the recent price surge, but has since fallen slightly to $82,000.
Looks like the price of the coin has been going up over the last few days | Source: BTCUSDT on TradingView
Featured image of Dall-E, chart from TradingView.com
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