- Retail Investors Interested in Bitcoin, While Whales Seemed Disinterested
- Activity on Bitcoin is decreasing, however, BTC’s market cap dominance is increasing
According to data provided by glass knotit has been observed that the number of addresses holding more than 0.01 Bitcoin [BTC] had reached a record level. This was indicative of the massive interest in Bitcoin from retail investors.
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David versus Goliath
The interest of retail investors can also be seen through Santiment’s data. According to Santiment, Bitcoin addresses that held between 0.01 BTC and 1000 BTC, started buying more Bitcoin.
This buying frenzy happened right after Bitcoin’s price crashed on December 15th. It emerged that after the said date, several retail investors decided to buy BTC at a discount.
However, during the same period, addresses containing 1,000 to 10,000 Bitcoins began to decline. This meant that BTC whales had started to exit their positions and were selling their BTC.
Source: Santiment
Glass half empty
It appeared that large addresses were losing faith in BTC. This sentiment was also shared by traders. According to data from Coinglass, the number of short positions taken against Bitcoin had increased over the past few days. At press time, 51% of traders had taken short positions against Bitcoin.
One of the reasons for the increasing number of short positions taken against BTC could be the growing foreign exchange reserve. According to CryptoQuantthe foreign exchange reserve had continued to increase, which indicated that the selling pressure on BTC could increase.
Source: coinglass
Another cause for traders’ pessimistic view could be due to the drop in activity on Bitcoin’s network. According to data provided by Santiment, Bitcoins the speed has dropped significantly over the past few days.
This indicated that the number of times $BTC was transferred between addresses had decreased. Coupled with falling speed, the number of BTC transfers has also seen a drop.
Source: Santiment
Bitcoin’s market capitalization dominance, however, was unaffected by the lack of activity or sentiment among traders. Over the past month, Bitcoins market capitalization dominance has increased enormously. According to data from Messari, Bitcoin had captured 39.16% of the overall crypto market.
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Combined with increasing market capitalization dominance, the volatility surrounding BTC fell 59.51% according to Messari. This made buying BTC less risky for interested investors.
Source: Messari
Whether the faith of retail investors outweighs the pessimistic view shared by whales and traders remains to be seen.
At the time of writing, BTC was trading at $16,840.85 and its price had fallen by 0.03%.