The trend of Bitcoin (BTC) accumulation has been picking up steam for the past two months, with investors holding less than one BTC, known as “shrimps,” actively adding to their coin stash. This is happening in stark contrast to large-scale investors or “humpback whales,” who hold over 10,000 BTC and have been steadily distributing coins over the same period.
Despite the remarkable surge of Bitcoin, which flirted with the $90,000 mark early Tuesday before settling down near $87,400, long-term holders appear relatively undeterred. They continue to clutch onto their Bitcoin holdings, thereby driving up the price demand.
The majority of the buying pressure seems to be stemming from the Nasdaq-listed Coinbase (COIN) exchange, a widely acknowledged gauge for institutional activity within the United States. But the smaller investors or “shrimps” are the ones primarily fuelling the ongoing price rally with their aggressive accumulation strategy.
Glassnode data portrays a clear picture of the state of affairs within the Bitcoin cohort. The smaller investors have been consistently accumulating Bitcoin over the past two months, coinciding with the cryptocurrency’s steep uphill climb from around $55,000 in September to nearly $90,000 in November.
This trend challenges the conventional narrative of whales being the “smart money” within the ecosystem. Contrary to this belief, the whales have been selling into the price strength, while retail buyers have been capitalising on the rally.
When we take into account the data from all the cohorts, miners, exchanges, and retail investors included, it becomes evident that the demand has been outstripping supply and issuance for the past three months.
Glassnode defines long-term holders (LTHs) as those who have held Bitcoin for more than 155 days. Historically, these investors have been known to distribute Bitcoin into price strength and accumulate at bottoms. However, they seem to be bucking the trend this time around, holding onto their balances, which suggests bullish expectations.
At present, LTHs hold 78% of the circulating Bitcoin supply, meaning over 15 million coins. In the past month, they have reduced their supply by only about 3%, which is a significant departure from their behavior during 2017 or 2021 when their supply dropped by as much as 20%.
The opposite trend is observable among short-term holders (STHs), those who hold coins for less than 155 days. They tend to buy Bitcoin on euphoric days like Monday when Bitcoin surged by 10%. Their supply is near all-time lows, with a brief upward tick. During previous bull markets, STHs have held as much as 35% or 50% of the supply.
This market behavior indicates a shifting landscape within the Bitcoin ecosystem, where retail buyers are emerging as the new “smart money,” and long-term holders show signs of unwavering bullishness.
