On-chain data shows that small Bitcoin holders have accumulated recently while whale ownership has declined, a sign that could be bullish in the long run.
Bitcoin investors with 0-1,000 coins have recently increased their holdings
Like a Twitter user has pointed out using data from Santiment that holders with wallet amounts in the 0-1,000 coin range have been aggressively rallying at recent lows. The relevant indicator here is the “Bitcoin Supply Distribution”, which tells us which portfolio groups currently hold what percentage of the total supply.
Wallets (or more simply, holders) are divided into wallet bands based on the number of coins they currently hold. For example, the 1-10 coin cohort includes all addresses that currently hold a minimum of 1 and a maximum of 10 BTC. The Supply Distribution metric for this group measures the collective balance of all portfolios that fall within this range.
Now, here is a chart showing the trend in the Bitcoin Supply Distribution data for the 0-1,000 coins and 1,000-1,000,000 coins:
Looks like the values of the metric for the two groups have moved oppositely to each other in recent days | Source: ₿igMak on Twitter
As you can see above, the Bitcoin Supply Distribution curve for the 1,000-1,000,000 coin band has recently seen a sharp decline. The holders belonging to this group are the whalesmeaning that the percentage of supply from these giant holders has dropped, suggesting that they have capitulated during this deep bear market.
In contrast, the stock share of the 0-1,000 coin group has been increasing rapidly recently, implying that private investors have accumulated large sums during the recent lows in the asset’s price.
The chart shows that a similar pattern was also seen during the 2018/2019 bear market, although the movement scale of both groups was much smaller. Interestingly, this trend only formed in that bear after the cyclical low had already been reached for BTC.
So, if history is anything to go by, this recent accumulation of the 0-1,000 coin group could help Bitcoin form the bottom for the current cycle (if not already in), and therefore reverse the coin into a bullish trend in the long term.
BTC price
At the moment of writing, The price of Bitcoin hovering around $16,800, up 1% over the past seven days. The crypto has increased in value by 2% in the past month.
The value of the crypto seems to still be stuck in a sideways trend | Source: BTCUSD on TradingView
Featured image by André François McKenzie on Unsplash.com, charts from TradingView.com, Santiment.net