Retail Bitcoin Purchase Spikes Accelerating Adoption?
On-chain data shows that retail Bitcoin investors have been aggressively buying the asset recently, a sign that adoption may be accelerating.
Bitcoin shrimp has accumulated aggressively lately
According to data from the analysis company at the chain Glass nodeonly 116 days in the entire history of the cryptocurrency have seen stronger accumulation from retail traders.
The relevant indicator here is the “net position change”, which measures the net amount of Bitcoin entering or exiting the wallet of a particular group or cohort in the market per month.
When the value of this calculation is positive, it means that a net number of coins will enter the wallets of the relevant group. This trend may be a sign that the cohort is accumulating right now.
On the other hand, negative values of the indicator suggest that these investors are currently transferring coins out of their wallets. Such a trend means that the group is currently selling.
Now, in the context of the current discussion, the cohort of interest is the shrimp group, which contains entities that have less than 1 BTC in their wallets.
Here’s a chart showing the trend in the total Bitcoin supply to the shrimp, as well as the cohort’s net position change, over the last few years:
The values of the metrics seem to have risen in recent days | Source: Glassnode on Twitter
As shown in the graph above, the total amount of Bitcoin held by the shrimp has been rising sharply for some time now and has reached a value of around 1.29 million BTC. This means that these investors have constantly bought more.
The rise has been particularly rapid recently, as the change in the shrimp’s net position shows a large peak. At the current value of the indicator, coins are moving into the supply of shrimp at a rate of about 37,000 BTC per month.
The chart also shows the curve for the number of trading days that have seen peaks in the shrimp’s net position change higher than the current one.
It appears that only 116 trading days in the entire history of the asset have seen the indicator register a higher value. This means that prawns have accumulated at a historically aggressive pace recently.
Since members of the shrimp group hold such a small amount of Bitcoin, these investors are likely to be retail traders. This means that growth in the supply of prawns can give a hint about the activity of the retailers.
Since the shrimp cohort has been growing rapidly recently, it seems reasonable to assume that the cryptocurrency has been widely adopted recently. New adoption is generally constructive for the coin, as new network users can provide a more sustainable base for long-term price movements.
BTC price
At the time of writing, Bitcoin is trading around $28,200, up 5% in the past week.
Looks like BTC has been moving sideways recently | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, Charts from TradingView.com, Glassnode.com
