WHO IS ACCUMULATING BITCOIN and WHO IS SELLING?
Everyone is excited for Bitcoin’s recent price action. It makes it looks as if a recovery to a bull run looks possible and crypto will moon again. There’s talks among other On chain analysts that Bitcoin is in an accumulation period. But who is buying and who is selling Bitcoin?
Let’s look into that.
This is the taker buy sell ratio. (day chart) Normally the price moves upward when this ratio moves up.
however, in the current BTC price pump, I was hoping for more money to flow into BTC to pump the price further.
However, the Taker Buy Sell ratio is starting to trend downward, which at some point in time, the price will correct due to more selling pressure.
When this ratio moves up it means more buying is happening, when it starts to dip, then more selling is happening.
Price action tends to move after this ratio.
Let’s take a look at another metric before going onto who’s buying.
This is the BTC exchange Netflow. a negative in this means more exchange outflows are happening. When we see this, we call it accumulation zone.
Currently, there’s an accumulation zone for BTC.
Ok, let’s look into who is buying.
This is the holders holding less than .1 BTC.
An increase means that holders within this supply distribution has increased their holdings. (based on hour chart)
This is the holders holding between 0.1–1 BTC (hour chart)
And here are the holders holding between 1–10 BTC (hour chart)
We can see that there’s been accumulation happening for holders holding less than 10 BTC.
Why pay attention to how the Bitcoin supply is distributed?
We pay attention to the supply distribution of Bitcoin because it tells us where majority of the supply is located and in which hands and which type of holders.
Price is determined by supply and demand. By knowing where the supply is, where it’s going and where it’s coming from, then we already know one part of the price equation. The hard part is calculating demand.
Now let’s shift to the population holding a larger BTC supply.
Here’s holders holding 10–100 BTC. (hour chart)
This is a key group as this entire population holds over 25% of the circulating BTC supply. We can see on here that this group sold the recent BTC price pump. Indicated by the black line, this group has sold 12k BTC.
Below is 100–1000 BTC (this group also holds over 25% of BTC’s circulating supply) (hour chart)
This group also had a similar reaction to the price pump which led them to selling approximately 24,500 BTC during the recent price pump.
Below is 1000–10000 BTC (this group also holds over 20% of BTC’s circulating supply) (hour chart)
For the 1000–10000 holders, here’s the overall though. (day chart)
For the overall of this population, there’s been accumulation happening, but some holders decided to sell some to take profits since their cost basis of purchasing was much lower.
We can see the estimated cost basis on when the accumulation happened.
This population of holders accumulated at 38–39k and sold some at 45–47k. A 15–20% gain in a month. Taking profit makes sense.
What interesting about this pump is that, larger holders are taking advantage of the pump and selling.
What’s good to note is that not all supplies are moved. Holders holding between 10–10000 BTC are still holding majority of the BTC supply.
It’s a complex situation to think about. If larger holders were to instead be buying more then I’d say price can potentially go higher, but it looks like they took advantage to sell or MAYBE move their BTC onto other addresses as this is still a possible scenario.
Nothing mentioned on here is Financial Advice because I dont know if price will dip or continue to go up. This is because WE ARE STILL IN AN ACCUMULATION ZONE.
Going back to this netflow chart, the netflow is still telling us that BTC is still being moved out of exchanges.
Biggest mystery is not knowing if and when another big player comes and buys.
Why a dump? is there bad news?
I think it’s profit taking. Here’s the Spent Output Profit ratio (hour chart). Spikes indicates profit zone. which larger holders who profited moved their coins onto exchange and sold over time.
My caution is that lower balance addresses are buying and larger holders are selling. This is what’s been happening all last week. I don’t know what will happen this week
I actually think this might be the 1st phase of larger holders selling. They tend to sell on the way up. and they still hold MAJORITY of the supply. (buy low, sell high) This is a behavior seen in past cycles. Larger bag holders does not always sell the top but instead sell and take profits on the way up.
On the other hand, smaller holders buy on the way up and sell on the way down. (buy high, sell low)
This analysis does not imply market top
This doesn’t mean that price will not move higher, if sentiment spikes and buyers rush in again, prices will spike regardless. But this is something to take awareness on. It looks like market manipulation to me and whales are trying to control BTC’s price within the current price range and they’re using this to dump their bags. This is bearish to me.
Keep in mind that this is for entertainment purpose only and none of this if Financial Advise. I am only reporting what I’m seeing and my thoughts on the market.