A small army of Bitcoin ( BTC ) investors has been fighting for months with their larger counterparts to maintain the price at $18,000.
Fishes are able to accumulate Bitcoins
There has been an on-chain divergence among so-called whales (entities holding more than 1,000 BTC) versus fishes (entities with relatively small amounts of BTC). Bitcoin fluctuates within the $18,000-$20,000 range.
Bitcoin fishes have been steadily accumulating BTC since the coin’s sideways movement. According to Glassnode data, the net Bitcoin supply of addresses holding 100-1,000 BTC has increased from 3.71 Million in June to 3.77 Million in October.
Entities with 100-1K BTC balances have Bitcoin supply. Source: Glassnode
The supply of Bitcoin at addresses holding a balance between 10 and 100 BTC has increased from 3.15 million to 3 million during the same time. Similar trends can be seen across entities that hold anything from 0.001 to 10 BTC.
The same period of Bitcoin’s sideways price movement coincided with a decrease in BTC supply by whales. Since June, for example, the Bitcoin supply by the 1,000-10,000 BTC cohort dropped from 3.82million to 3.69million.
Bitcoin supply held by entities with balance 1K-10K BTC. Source: Glassnode
In the same period, the 10,000-100,000. BTC cohort also saw a decrease in its Bitcoin holdings, from 1.98 million down to 1.92million.
The on-chain data above suggests that fishes are more certain than whales about a possible Bitcoin price bottom close to $18,000.
These small investors may have been subject to massive selling pressure from larger investors. However, the downside risk of a declining whale population is historically higher, as shown below.
Number of Bitcoin whales vs. BTC price. Source: Glassnode
One exception is the time that Bitcoin hit its all-time high of $69,000, while the number and size of whales was relatively stable. This could indicate that whales have less influence than in previous years, especially as the balance of exchanges continues its multi-year lows.
BTC and gold correlation rises
According to reports, investors continue to view bitcoin as a safe haven investment.
Alkesh Shah, a digital strategist at Bank of America, , cited Bitcoin’s weakening correlation to US stock indexes as well as strengthening correspondence with gold’s price movements, as evidence that the cryptocurrency is aiming to live up its “digital gold” narrative.
Bitcoin’s 40-day relationship with riskier markets like Nasdaq Composite or S&P 500 has been steady at 0.69 and 0.75 respectively. These levels are well below the record levels of a month ago. However, it has risen from 0.67 in August to 0.67 this October.
BTC/USD and XAU/USD 40-day correlation coefficient. Source: TradingView
They wrote that a slowing positive correlation with SPX/QQQQ and a rising correlation with XAU suggest that investors may consider Bitcoin a relative safe-haven while macro uncertainty continues and a bottom remains to be found.
Similar: Bitcoin will rise to over $100K by 2023, before the ‘largest bear markets’ — trader
Others believe that Bitcoin’s price will fall below $18,000 support. Filbfilb is an independent market analyst who believes the Bitcoin price could fall as low as $10,000 due to the tight correlation with risk assets, macroeconomic headwinds, and other factors.
These views and opinions are the author’s and do not necessarily reflect those of Cointelegraph.com. You should do your research before making any investment or trading decision.
