On-chain analytics firm Santiment has revealed how Bitcoin is currently in a bullish zone based on the behavior of whale and retail investors.
Bitcoin major and retail entities have recently shown opposite trajectories
In a new after On X, Santiment talked about how Bitcoin investor behavior currently compares between the top and bottom. Sharks and whales represent the former category, while private investors represent the latter category. Formally, the portfolios of both sides of the market are defined as 10 to 10,000 BTC and less than 0.01 BTC. Below is the chart shared by Santiment showing the trend in Bitcoin supply from each of these cohorts over the past few months.
As visible in the chart, the Bitcoin sharks and whales have seen their combined supply rise in recent days, indicating that the big investors have gathered. In the meantime, private investors have sold their shares. This could imply that big money hands are backing the latest price surge, while retail investors don’t believe the run will continue, so they’re leaving with their profits. If history is anything to go by, this could be a positive sign.
According to the analytics firm, this divergent whale and retail behavior places the market in what it defines as the “Very Bullish” zone. “This is the ideal setup for a bull run,” Santiment said.
In the chart, the analytics firm has also highlighted four other zones for BTC based on the trajectories followed by whale and retail stocks. “Very Bearish” (colored red) follows the same contrarian logic as the Very Bullish region, with the zone appearing when large entities are selling and retail is piling up. Bearish (orange), Neutral (yellow) and Bullish (blue) map the spectrum between the two extreme areas.
Bitcoin’s latest venture into the green Very Bullish zone has come as sharks and whales have loaded 32,693 BTC (worth about $3.1 billion) since January 10, representing a 0.24% supply increase. Retail investors sold 149 BTC ($14.4 million) during this period, corresponding to a decline of 0.30%.
It now remains to be seen whether BTC will remain in this region for long or whether there will be a new shift in investor behavior. “How long this will last depends on how long the retail industry doubts the mini-rally that has formed,” Santiment explains.
BTC price
Bitcoin witnessed a break past the $97,000 level on Wednesday, but the bullish momentum has since cooled, with the BTC price returning to the $96,900 mark.