The BTC price retracement primarily surfaced due to increased buying activity among addresses that hold less than 1 BTC. In contrast, the Bitcoin wallets with balances between 1,000 BTC and 10,000 BTC did little in supporting the upside move, data collected by Ecoinometrics showed.
“Bitcoin is still stuck in a situation where small addresses are willing to stack sats [the smallest unit account of Bitcoin], while the whale addresses aren’t really accumulating,” the crypto-focused newsletter noted after assessing the change in Bitcoin amounts across small and rich wallet groups, as shown in the graph below.
Ecoinometrics further asserted that the situation for Bitcoin is “not ideal,” suggesting that the BTC price may end up resuming its decline in the absence of influential buyers.
“So much money is pouring into the space, it would make no sense that the crypto prices would go much below that. If you’re long, it feels painful, but it’s probably healthy.”
Bitcoin accumulation stronger among retail
In reality, unique wallets holding more than or equal to 1,000 BTC have been declining all across 2021, with data from Glassnode showing its number dropping to 2,147 from 2,475 since Feb. 9.
In contrast, the number of unique wallets holding at least 0.01 BTC (around $485 at current exchange rates) rose in 2021, from 8.46 million to 9.39 million year-to-date.
Meanwhile, addresses holding at least 0.1 BTC (~$4,855) surged from 3.12 million to 3.30 million in the same period, indicating that “fishes” played a key role in pumping the Bitcoin price from around $30,000 to as high as $69,000 this year.
One more piece of evidence showing that retail investors have been bullish on Bitcoin, came from addresses that hold at least 1 BTC.
These wallets decreased in quantity in the first half of 2021 as the BTC market grappled with the China ban and other negative news, but started increasing the second half as El Salvador adopted Bitcoin as its legal tender.
The number of Bitcoin wallets with at least 1 BTC also kept rising during the BTC price correction from $69,000 to $42,333 in the November-December session, signaling accumulation. It reached a seven-month high on Wednesday just as Bitcoin underwent a rebound to $50,000 from its weekly low near $46,000.
On-chain analyst Willy Woo also spotted retail accumulation rising to levels seen after the March 2020 crash, which led to Bitcoin’s two-year-long bull run.
Additionally, Bitcoin’s momentum indicator that preceeded its price breakout to $69,000 earlier this year is also hinting at a potential BTC price breakout ahead.
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