The Daily Dive #132 - Retail And Whale Accumulation Trends
Retail And Whale Trends
In today’s Daily Dive, we will cover some of the estimated accumulation and distribution trends of whale and retail entities. There’s many different ways to define what makes an entity “retail” or “whale.”
In this analysis, we’re defining retail as the bitcoin supply held by entities under 10 BTC, i.e., that looks at the behavior of any entity holding less than 10 BTC. We’re defining whales as the bitcoin supply held by entities above 10 and below 10,000 BTC. Glassnode’s data science heuristics helps define and determine different entities.
What can be useful is to look at the 30-day percentage change across these groups to understand, at a high-level view, the rate at which retail or whale groups are adding or selling bitcoin. The below chart shows the periods when the supply of both groups is increasing, decreasing or going in opposite directions:
Currently, we’re seeing a strong accelerating trend of retail buying over the last two months while whale supply is slightly declining. The best sign (in blue) is to see both groups adding to their bitcoin supply signaling stronger demand. Typically over the last year, there have been sustained periods of retail adding bitcoin at local tops while whales were selling.
Although a smaller share of circulating supply, we’re seeing some of the fastest acceleration in retail supply under 0.1 BTC that we’ve seen over the last few years. Retail tends to always be accumulating with not many periods of distribution.
Whales on the other hand, distribute bitcoin more frequently and tend to do so at local tops. It’s likely that their selling, without bigger waves of buying demand, end up influencing or deciding the local tops. Currently, whales are showing some slight distribution at similar levels we saw at previous local tops. The rate of change is still well below what we saw in May 2021.
Although this is not a perfect way to measure estimated whale or institution behavior, we can also leverage the bitcoin/bitcoin equivalent fund inflows and outflows data from Bytetree. This data aggregates the publicly available inflow and outflow data from nearly 20 bitcoin exchange-traded products. It captures futures ETFs (like BITO) and spot ETF products (like the Purpose Bitcoin ETF) denominating flows in bitcoin. You can read more about the data here.
The below chart shows the 90-day cumulative inflows which look to be a major, leading driver of bitcoin price. This makes sense since we’re now in a period where institutional interest and demand is a larger price catalyst.
Looking at the 30-day cumulative fund flow chart shows a rise in outflows over the last month. Outflows would show investors selling out of positions on the net. These 30-day cumulative outflows are now just shy of the level of outflows we saw back in June 2021. For bitcoin price to have a parabolic type of move or a sustained rally, we would likely need to see this demand pick back up.
