Market Reactions to Bitcoin’s Price Decline: Insights from Retail and Whale Investors

Bitcoin has seen bearish trends in recent weeks, losing more than 50% of its value since reaching a peak of $60,000 earlier this year on February 6. Although there has been some recovery, the cryptocurrency remains significantly down for the year.

Who’s Buying and Selling?

An analysis from Santiment has shown shifts in the behavior of various investor groups:

Wallets holding between 10 and 10,000 bitcoins have decreased their holdings by 0.8% since early October.
In contrast, micro-investors (those holding 0.1 BTC or fewer) have increased their stakes by 2.5% during the same period.

The study indicated that this disparity may not signal an imminent price recovery.

“We need to see both Bitcoin groups begin to change their behavior. Without support from significant stakeholders, any potential rally will likely lack momentum,” Santiment remarked, noting that retail investors currently hold the largest amounts in nearly two years.

Bitcoin Investor Behavior Source: Santiment

ETF Investor Trends

ETF investors, who initially contributed over $6 billion to Bitcoin in the lead-up to its peak of over $126,000, have since exhibited a worrying trend of withdrawals. In just three consecutive weeks in November alone, they pulled more than $3.5 billion from their investments. This pattern has persisted into the new year, with spot Bitcoin ETFs undergoing a consistent loss streak, drawing attention and concern from analysts.

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