On-chain data shows the Bitcoin retail investors had been showing an exodus in the leadup to the breakout to a new all-time high (ATH).
When the value of this metric rises, it can be due to a number of reasons. New investors joining the network and old ones who had sold earlier returning both naturally lead to an uptick in the indicator. Similarly, existing users creating multiple wallets to manage their holdings or for a purpose like privacy also adds to the trend.
Now, here is the chart shared by the analytics firm that shows the trend in the Bitcoin Total Amount of Holders over the last few months:
As displayed in the above graph, the Bitcoin Total Amount of Holders has recently been on the way down, indicating that a net amount of holders have been liquidating their wallets, potentially to exit the market.
The latest exodus from the small hands has led into BTC’s breakout to a new ATH beyond the $113,000 level. From the chart, it’s visible this is not actually an unusual trend, as past periods of selling from the retail cohort have also preceded bullish price action in the cryptocurrency.
As Santiment notes,
When retail shows FUD (whether through fear or impatience), these are usually prime spots for smart money to move in and accumulate. This time has been no different.
This pattern is another case of the Bitcoin market being probable to move in the direction that the crowd least expects. An excess of fear usually tends to lead into bullish reversals, while overhype may result in tops.
It now remains to be seen how the Total Amount of Holders trend would shift now that BTC is rallying. A sharp reversal in the metric could naturally imply the retail crowd is now feeling Fear Of Missing Out (FOMO).
Bitcoin is in ATH exploration mode as its price is currently floating around $113,600.
