After achieving a record high of $109k about fourteen days ago, Bitcoin [BTC] has been experiencing a period of sideways trading without significant movement.
During this time, it has been range-bound between $98k and $107k, indicating a potential shift in market dynamics in the near future.
According to data from CryptoQuant, there has been a noticeable change in the behavior of retail traders and whales in the market.
Retail Traders Surpassing Whales in Bitcoin Transactions
Recent analysis suggests that retail traders are surpassing whales in terms of deposits on exchanges.
Over the last month, retail investors using platforms like Binance have notably increased their BTC deposits, reaching around 6,000 BTC in total.
This trend among retail participants reflects a sense of fear prevailing in the market, leading investors to offload their holdings in order to secure immediate gains. Such behavior exerts temporary downward pressure.
In contrast, whale deposits on exchanges, particularly on Binance, have decreased significantly to 1,000 BTC. A decrease in whale deposits indicates that major holders are storing their BTC off exchanges for long-term holding, signaling a positive outlook for the market.
These divergent trends in sentiment between retail traders and whales suggest a distinctive shift in market dynamics, with retail sellers dominating while whales are more reserved in their selling behavior.
Implications for Bitcoin’s Market Behavior
Although an increase in exchange inflows usually has a negative impact on prices, observations by CryptoCrypto’s analysis indicate that large holders are actively absorbing the selling pressure from retail investors.
Despite the overall decrease in inflows across exchanges, which have dropped to a monthly low of 2.33 million, it implies that there is a notable accumulation of BTC by investors.
Furthermore, the ongoing trend of accumulation is supported by a declining Stock-to-Flow Ratio, currently at a Multiple 463 S/F ratio of 0.26 over the past month. A value of 0.26 for Bitcoin’s Multiple 463 S/F ratio signifies that it is trading at 26% of its estimated value.
Historically, such low levels have indicated potential accumulation phases and have preceded significant upswings in Bitcoin’s price. For instance, in November 2024, when the ratio dropped to 0.25, it was followed by a bullish surge past $100k.
In essence, even though retail traders are selling at a faster pace than whales, the active accumulation by major holders is counterbalancing this pressure effectively.
With whales engaging in significant accumulation, Bitcoin is likely to continue its uptrend with occasional corrections as retail participants continue to sell off their holdings.
If the current market conditions persist, Bitcoin is projected to retest $105,500 and then aim for $107k. However, a correction at the current stage could potentially lead Bitcoin to retrace back to $102,780.