The price of Bitcoin it is facing its biggest decline ever this cycle, after falling nearly 50% from its all-time high of $126,000. The decline ultimately caused a significant shift in sentiment among large BTC holders and retail investors, who appeared to be moving in different directions.
Smart Money Returns, Selling Involves Risk
Although the price of Bitcoin has fallen significantly to the $ 73,000 mark, an important division has emerged among BTC investors, which can play a role in its next direction. Specifically, this ongoing divide is seen between large BTC owners or whales and retail owners.
A recent analysis by Joao Wedson, market expert and founder of Alphractal, shows that the whales are starting to close their long positions in BTC while the shopkeepers walk in the opposite direction. Looking at the chart, high value investors closed their long open at around the $75,000 price level.
Wedson’s research focuses on the Bitcoin Whale vs Retail Delta metric, which is a powerful tool as it often anticipates what the price will do next. The trend suggests that large players minimize risk and lock in profits. Meanwhile, small traders increased their bullish exposure in anticipation of potential duplication.
This is a common practice in a highly volatile market, as institutional traders tend to be opportunistic. At times like these, these great investors tend to hunt for volatility, opening longs and shorts aggressively, and later. minimize exposure.
On the other hand, retail investors tend to be stubborn, which is evidenced by holding positions longer than they should. The main goal of this action from investors is greed rather than structure. According to experts, two scenarios seem more likely now that whales are closing for long periods or starting new shorts at these levels.
The first scenario is that Bitcoin will experience strong sideways movement for a few days before deciding its next trajectory. For the second case, the price of BTC may continue to fall. Meanwhile, the imbalance raises questions about the short-term viability of the current market structure.
BTC Addresses Are In Distribution Mode
Given the continued decline in the price of Bitcoin, Joao Wedson shared in another post on X that much BTC wallet addresses seems to switch to distribution mode. Such developments are in direct opposition to what many market participants believe.
In the past, addresses holding 0.1 BTC to 100 BTC have been the most successful group. When prices are low, this group tends to form and then dissolve and become stronger when prices are high.
Furthermore, this practice challenges the common misconception that relying solely on mega-whale addresses is an unreliable strategy. However, the structure of the market is shaped by the systematic behavior of entire clusters, not individual large wallets.
Featured image from Pixabay, chart from Tradingview.com
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