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Research Shows Some Bitcoin Whales are Selling but Retail Investors are Continuing Buying Spree

Bitcoin is currently stuck below $50k and in short-term bearish territory. As a result, some big holders of the cryptocurrency aka whales are reportedly offloading some crypto. However, even when big players are looking to short sell their crypto, retail buyers are stepping up and snapping it up. According to latest data, retail buying is highest since the March 2020 crash when the index fell to as low as $3.6k in a single day.


Retail Buying Keeping Things Tight for Bitcoin

Retail buying is defined within the crypto world as wallets with less than 1 BTC consolidating their holdings. These are normally average users who are accumulating Bitcoin over time. But, their purchase history shows that they only come into play when the price takes a massive hit and becomes lucrative for them. Last time, their activity was this high was back in March 2020 when the index reached a multi-year low of $3.6k. Now, at a much higher price range of $46k-$49k, these users are back in action.

According to crypto analyst Coinmetrics:


However, the same analyst continued and stated that big players have a lot of BTC reserves and therefore, the situation is not ideal for the cryptocurrency. So, there is a limit to what retail investors can do here. The bears are therefore hopeful that this whole situation will go in their favour.


What is Causing Panic in the Markets?

The situation especially became concerning for Bitcoin and the rest of the crypto markets in general as the US Federal Reserve announced the tightening of the monetary policy including the $120 billion per month stimulus entering the system as part of the Coronavirus relief measures. According to analytics, this “free money” entering the system was part of the reason why the cryptocurrency went so high in 2021 as more and more people found themselves at the receiving end of some cash.

However, as US tightens the policy amid 40-year record inflation figures, the markets are expected to take some hits, not just not Bitcoin itself. Many of the stock and forex markets had taken a massive hit in the early days of the pandemic and that is when the stimulus was announced to try and prop them up. However, according to some analysts, it was very aggressive and as a result, the markets rose to record highs despite no on-ground activity for a large part of the last 2 years. Even when the economy opened, shipping problems, chip shortages and other obstacles resulted in more roadblocks and still the markets kept rising. Now, it appears as if they are in for a big correction. It will be interesting to see how the crypto market responds and whether or not there is some correlation between it and the other markets.

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