Small Bitcoin Investors Stop Whales From Crashing BTC Price Below $18K
An army of small Bitcoin (BTC) investors have been battling with their larger counterparts for months to keep the price above $18,000.
Bitcoin Accumulation Strong Among Fish
In particular, there has been some divergence on the chain between so-called whales (units holding more than 1,000 BTC) and fish (units holding relatively smaller amounts of BTC) as Bitcoin continues to fluctuate within the $18,000-$20,000 range.
Bitcoin fishermen have been accumulating BTC during the coin’s sideways trend. For example, net Bitcoin supply held by addresses with 100-1000 BTC balances has increased from 3.71 million in June to 3.77 million in October, according to data provided by 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 units that have anywhere between 0.001 and 10 BTC.
Meanwhile, the same period of Bitcoin’s sideways price action has coincided with a decline in the BTC supply held by whales. For example, the Bitcoin supply held by the 1,000-10,000 BTC cohort has fallen from 3.82 million to 3.69 million since June.
Additionally, the 10,000-100,000 BTC cohort has seen its Bitcoin holdings decrease from 1.98 million to 1.92 million in the same time frame.
A basic interpretation of the on-chain data mentioned above is that fish are more confident than whales on a potential Bitcoin price bottom near $18,000.
But while these small investors may have absorbed massive selling pressure created by larger investors, the downside risk is historically greater with a declining whale population, as shown below.
Interestingly, one of the few exceptions is when Bitcoin reached its peak price of $69,000 while the number of whales remained relatively flat. This may indicate that whales have less influence on the market compared to previous years, especially as the balance sheet on the stock exchanges continues to reach multi-year lows.
BTC Correlation With Gold Rises
Pisces continues to rally amid reports that investors are looking to Bitcoin as a safe haven once again.
For example, Alkesh Shah and Andrew Moss, digital strategists at Bank of America, cited Bitcoin’s weakening correlation with US stock indices and strengthening correspondence to gold price movements as a sign that the cryptocurrency wants to live up to its “digital gold” narrative in the future.
In particular, Bitcoin’s 40-day correlation with riskier markets, such as the Nasdaq Composite and the S&P 500, has flattened near 0.69 and 0.75, respectively, which are below their record highs from a month ago. On the other hand, the correlation with gold has increased from zero in August to 0.67 in October.
“A declining positive correlation with SPX/QQQ and a rapidly rising correlation with XAU indicates that investors may view Bitcoin as a relative safe haven as macro uncertainty continues and a market bottom remains to be seen,” they wrote.
Related: Bitcoin Will Soar Above $100,000 in 2023 Ahead of ‘Biggest Bear Market’ – Trader
However, others expect Bitcoin’s price to eventually break below the $18,000 support level. They include independent market analyst Filbfilb who claims that BTC price could fall as low as $10,000, given the tight correlation with risk assets and macroeconomic headwinds.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade involves risk, you should do your own research when making a decision.
