Bitcoin Price Drop: How Whales and Retail Investors React

Here’s a look at who bought and who sold during BTC’s most recent retracement.

Bitcoin’s price movements since early October can safely be categorized as bearish, given that the asset has lost more than 50% of its value, from its all-time high to its multi-year low of $60,000 on February 6.

Although it has recovered some ground since then, the cryptocurrency is deeply in the red even on a year-over-year basis. Santiment investigated which investor group sold their shares and which increased their positions during the months-long correction.

Who sells and buys?

The analytics company post reveals an interesting pattern. It says wallets holding between 10 and 10,000 bitcoins have reduced their positions by 0.8% since the peak in October. In contrast, micro-investors, those with 0.1 BTC or less, increased their holdings by 2.5% within the same time frame.

The analysis shows that this behavior of both groups does not indicate an imminent price reversal.

“Optimally, we are starting to see these two Bitcoin groups starting to change course. Without the support of key stakeholders, any spark of a rally will be somewhat limited due to the lack of major capital,” Santiment said, before indicating that retail investors are undeterred and are currently holding the highest amount in almost two years.

ETF investors are flocking

In contrast to the small discrepancy between the two investor groups surveyed by Santiment, those gaining exposure to the largest cryptocurrency through ETFs have shown a clear and painful trend. In the two weeks leading up to an all-time high in assets of over $126,000, they poured more than $6 billion into the funds.

Since then, red has dominated almost every week, with multiple examples of net outflows of $1 billion or more. In three consecutive weeks in early November, they withdrew more than $3.5 billion. This behavior continued into the new year, and the spot Bitcoin ETFs are currently on a massive red streak of five straight weeks in the red.

Data from SoSoValue shows that these investors raised $1.33 billion in the week ending January 23. Another $1.49 billion followed, but the upside is that net inflows have fallen below $360 million over the past three weeks. Nevertheless, total net inflows into the spot BTC ETFs fell from $62.77 billion in early October to $54 billion last Friday.

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