Bitcoin has soared by $20,000 in just the past week, and analyzing the data reveals the driving forces behind this impressive rally. Blockchain data shows that while large holders (whales) continue to follow a “sell on rise” strategy, smaller addresses—often referred to as “shrimps”—are actively accumulating Bitcoin.
Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, came close to breaking the $90,000 barrier early Tuesday before pulling back to around $87,400 at the time of writing. Despite this slight dip, BTC has still seen a 27% increase over the past week, according to CoinDesk data.
Looking at the broader picture, it’s clear that the recent surge in Bitcoin’s price has been largely fueled by buying activity on the Nasdaq-listed Coinbase (COIN) exchange, a platform often seen as a proxy for institutional involvement in the U.S. market. However, a deeper dive into the data reveals that smaller addresses, or “shrimps,” have been steadily increasing their holdings as they capitalize on the current rally.
Shrimps: The New Smart Money
According to Glassnode data, a breakdown of Bitcoin’s address cohorts shows a clear trend: all groups, except for the largest holders (referred to as “humpback whales,” who hold over 10,000 BTC), have been accumulating Bitcoin over the last two months. This period coincides with Bitcoin’s price climb from around $55,000 in September to just under $90,000 in November.
This data challenges the traditional narrative that whales are the “smart money” in the crypto market. In fact, it appears that while whales have been selling during price surges, retail investors—specifically the smaller addresses—are the ones buying into the rally. CoinDesk research suggests that, over time, retail investors have evolved into the market’s “smart money.”
Supply Outpacing Issuance for Three Months
When looking at the total accumulated Bitcoin across all cohorts, including miners, exchanges, and retail investors, the data from the past 30 days reveals that a total of 26,000 BTC have been accumulated. This accumulation trend has been consistent for the past three months, indicating that demand is consistently outstripping supply and issuance, especially since September.
Long-Term vs. Short-Term Holders
Glassnode defines long-term holders (LTHs) as those who have held their Bitcoin for over 155 days. Historically, LTHs tend to sell their Bitcoin during periods of price strength, which has been the case in previous bull runs, such as in 2017 and 2021. They typically accumulate more during market lows.
This time, however, LTHs seem to be holding on to their Bitcoin, signaling a strong bullish outlook. Currently, long-term holders control 78% of the circulating Bitcoin supply, which equates to roughly 15 million coins. In the past month, they have only reduced their holdings by about 3%, a stark contrast to the 20% drop seen during previous bull markets.
In contrast, short-term holders (STHs), or those who have held Bitcoin for less than 155 days, tend to buy during euphoric price spikes, such as the 10% jump in Bitcoin’s price on Monday. Their share of the supply is near historical lows, having been as high as 35% or even 50% in previous bull runs.
This version maintains the key points and data from the original article while restructuring and rephrasing the content to provide a unique take on the information.
