On-chain data shows that the smallest of Bitcoin investors, Shrimp, has sold off recently. Here’s what that could mean for the room.
Total number of Bitcoin holders declines as retail investors leave
According to data from the on-chain analytics company FeelingTHE Total number of holders the measure has seen a decline recently. This indicator tracks the total number of addresses on the blockchain that currently have a non-zero balance.
When the value of this measure increases, it can be a potential sign that adoption cryptocurrency is spreading right now. On the other hand, a decline in its value suggests that some investors have decided to exit the asset as they completely empty their portfolio.
Now here is a chart that shows the trend in the total number of Bitcoin holders over the past few months:
Looks like the value of the metric has been going down in recent weeks | Source: Santiment on X
As seen in the chart above, the total number of Bitcoin holders has recently observed a decline, implying that a net number of investors have exited the cryptocurrency.
The latest drop in this metric is the sharpest since March’s all-time high (ATH). It is possible that the latest rally above $67,000 is what prompted these holders to sell.
In the same chart, Santiment also attached data on the total amount of Bitcoin supply held by investors with less than 0.1 BTC in their wallet. These small holders represent a part of individual investors and are commonly known as shrimp.
The chart shows that combined BTC shrimp holdings have been declining recently, with these smaller entities offloading 0.46% of their coins in the past week alone.
Interestingly, this drop was accompanied by a drop in total holders, so it seems possible that those liquidating their wallets are in fact these small hands.
Retail investors may be thinking that the current price rally is not going to last long and so they might want to get out while they still can at these relatively high prices. Larger entities in the market, like sharks and whales, could potentially scoop up these coins, increasing their holdings even further.
“Historically, small wallets moving their coins to larger wallets is an encouraging and bullish sign for BTC,” notes the analytics firm. It now remains to be seen whether this latest trend will indeed end up becoming the bullish spark the asset needs or not.
BTC Price
Bitcoin’s latest surge means the price of the cryptocurrency has now surpassed the $67,000 level for the first time in almost a month. The last time a rally above this level occurred, BTC quickly lost its bullish momentum. It is unclear whether a similar fate awaits BTC this time as well.
The price of the asset appears to have surged over the past few days | Source: BTCUSD on TradingView
Featured image by Erling Løken Andersen on Unsplash.com, Santiment.net, chart by TradingView.com
