What market signal is this when retail investors sell off?

Author: Ciaran Lyons, CoinTelegraph; Translated by: Wuzhu, Golden Finance

summary

• In the past six weeks, Bitcoin investors have increased their holdings of 81,338 bitcoins, showing confidence in the future price upward trend.

• The wallet holding less than 0.1 bitcoins sold about 290 bitcoins, indicating that small retail investors were either selling in panic or selling out of boredom.

• Since March 26, the inflow of Bitcoin spot ETFs has reached US$4.41 billion.

Although large Bitcoin holders remain confident and continue to increase their holdings, data from cryptocurrency analysis platforms show that small retail investors have been selling Bitcoin as Bitcoin prices are consolidating for a long time below $100,000.

Santiment said in a May 6 X article that the very different behavior between Bitcoin whales and retail investors often heralds that Bitcoin may be heading for another uptrend.

Bitcoin retail players show signs of shrinking

" When large wallets gradually increase holdings, while retail investors panic selling/selling out of boredom, this is usually a strong long-term signal that prices are waiting for the opportunity to break through again," Santiment said.

Since March 26, Bitcoin wallet holders with 10 to 10,000 BTC have increased their holdings of 81,338 BTC in the past six weeks.

This means that the total holdings of this group have increased by 0.61%. Santiment said this could signal that Bitcoin prices could retest the $100,000 psychological barrier in the near future. “With May coming, if you’re optimistic that Bitcoin will reach $100,000 in the near future, most of the major stakeholders of Bitcoin are moving in the right direction,” Santiment said.

However, Bitcoin wallets holding less than 0.1 BTC sold about 290 bitcoins during the same period. According to CoinMarketCap, Bitcoin has been trading between $76,273 and $97,210 since March 26.

As of the time of this article, Bitcoin was trading at $96,360. Source: CoinMarketCap

On February 1, after US President Donald Trump announced the imposition of tariffs, the price of Bitcoin fell below $100,000 and has not yet recovered to this level. As of press time, Bitcoin was trading at $96,360.

At the same time, spot Bitcoin ETF holders also increased their holdings during the same period. According to Farside data, the total inflow of US spot Bitcoin ETFs has reached US$4.41 billion since March 26.

Bitcoin's dominance continues to soar

The overall cryptocurrency market is still dominated by Bitcoin. According to TradingView, on May 6, Bitcoin’s dominance reached 65%, the highest level since January 2021.

As of the time of publication, the indicator was 65.19%. Meanwhile, CoinMarketCap 's altcoin season index still shows "Bitcoin Season", indicating that the market favors Bitcoin more than altcoins.

While some analysts have been watching Bitcoin hit record highs at the end of June, Bitfinex analysts recently said Bitcoin needs to continue to hold the $95,000 mark to recover and retest its all-time highs or face a deeper pullback.