Bitcoin price avoided a larger drop below $18,000 in recent months. This has raised expectations that a market base has formed. An army of small Bitcoin investors has been fighting their larger counterparts for months to keep the price above $18,000.
While whales are selling, fish are accumulating Bitcoin
Recently, Bitcoin continues to fluctuate in the mid-$18,000-$20,000 range. In this environment, there were some on-chain differences in the word between whales and fish. Bitcoin fishes are accumulating BTC during the coin’s sideways trend. For example, according to data from Glassnode, the net supply of Bitcoin held by addresses with 100-1,000 BTC balances increased from 3.71 million in June to 3.77 million in October.
Similarly, the supply of Bitcoin in the hands of addresses with 10-100 BTC balances has also increased. It increased from 3 million to 3.15 million in one-to-one turnover. The trend is similar in the middle of assets with something random in the middle of 0.001 to 10 BTC.
In the middle, Bitcoin’s sideways price action coincided with the drop in BTC supply held by whales. For example, the supply of Bitcoin held by the 1,000-10,000 BTC cluster has been falling since June. Accordingly, it decreased from 3.82 million to 3.69 million during this period.
Additionally, the 10,000-100,000 BTC cluster dropped BTC holdings from 1.98 million to 1.92 million in the same time frame.
A fundamental interpretation of the aforementioned on-chain data is that fish are more confident than whales about a potential Bitcoin price floor around $18,000. For now, these small investors absorb the massive selling pressure created by the larger investors. However, as shown below, the downside risk with declining whale populations is historically greater.
Interestingly, one of the few exceptions is when Bitcoin hits an all-time high of $69,000 and the number of whales remains relatively stable. This indicates that whales are having less influence on the market compared to previous years, especially as stability in stock markets continues to hit several-year lows.
Gold and BTC correlation on the rise
Pisces is piling up amid reports that investors are seeing Bitcoin as a safe haven asset again. For example, Alkesh Shah and Andrew Moss, digital strategists at Bank of America (BofA), cited Bitcoin’s weakening correlation with U.S. stock indexes and strengthening correspondence on gold’s price movements as a sign that the cryptocurrency wants to keep pace with the “digital gold” narrative in the future. is showing.
In particular, Bitcoin had strong correlations with riskier markets such as the Nasdaq Composite and the S&P 500. However, the 40-day correlation is below record levels compared to a month ago. These are flattening around 0.69 and 0.75 respectively. On the other hand, its correlation with gold rose from zero in August to 0.67 in October. Strategists make the following assessment:
Positive correlation with SPX/QQQ is slowing down. The correlation with gold is rising rapidly. Macro uncertainty and market floor continues to be seen. In this environment, this shows that investors see Bitcoin as a relatively safe haven.
Others, however, expect the BTC price to eventually drop below the $18,000 support level. One of them, independent market analyst Filbfilb, claims that BTC will fall as low as $10,000. He attributes this to a tight correlation with risk assets and macroeconomic headwinds. Filbfilb is a market-known analyst with successful Bitcoin claims. For the analyst’s accurate predictions Koindeks.comCheck out this article.