Bitcoin Sees Smart-Money Buying As Retail Sells Into Rally

On-chain data shows the retail-sized Bitcoin wallets have been taking profits during the recent surge while the large investors have been buying.

Bitcoin Is Observing Accumulation From The Sharks & Whales

As highlighted by on-chain analytics firm Santiment in an X post, Bitcoin investor behavior has diverged between the top and low ends recently. The indicator of interest here is the “Supply Distribution,” which tells us about the amount of BTC that a given wallet group is holding.

Addresses or investors are divided into these cohorts based on the number of coins that they are carrying in their balance. The 1 to 10 coins group, for example, includes all holders owning between 1 and 10 BTC.

In the context of the current topic, two investor ranges are of focus: 0 to 0.01 BTC and 10 to 10,000 BTC. The former corresponds to the smallest of retail traders on the network, while the latter includes the large entities like the sharks and whales.

Below is the chart shared by Santiment that shows the trend in the Bitcoin Supply Distribution for these two ranges over the past month.

The two metrics appear to have diverged in recent days | Source: Santiment on X

As is visible in the graph, the Bitcoin retail cohort was accumulating at the end of April while the sharks and whales saw their holdings move flat. Since the start of May, however, the trend has shifted; the retail investors have taken to selling while the large holders have been expanding their wallets instead.

More specifically, the 10 to 10,000 BTC group has accumulated 16,622 tokens during the first few days of May so far, equivalent to a rise of 0.12% in its total holdings. At the same time, the retail entities have sold 28 BTC instead, reflecting a decline of 0.05% in the cohort’s supply.

The opposite trajectories in the Supply Distribution of the two groups have interestingly arrived alongside a price surge in the cryptocurrency. Historically, this type of opposite behavior between the small and large entities has actually tended to be the ideal bullish combo. As Santiment explained:

The strongest bull runs in crypto historically occur when smart money adds more coins to their wallets, while small wallets drop out. It’s a short sample size here in May, but so far things are moving in the right direction to justify further price rises throughout cryptocurrency.

It now remains to be seen whether the divergence between big-money investors and the retail cohort will continue in the coming days and if so, whether it will allow the rally to march further.

BTC Price

Bitcoin neared the $83,000 level during its latest price surge, but the coin has since seen a minor pullback 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 from Dall-E, chart from TradingView.com

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