bitcoin's price recovery above the $67,000 level has triggered a round of selling, but it doesn't come from the usual field of large investors selling. This time, it is the small traders who are unloading their bags and putting selling pressure on the price. However, this is not all bad given that such sales have historically been bullish for the price of bitcoin.
bitcoin retail is dumping its bags
In a report on x (formerly twitter), on-chain data tracker Santiment revealed an interesting trend among small bitcoin investors. When the price of bitcoin surpassed $67,000 over the weekend, these small wallets took advantage of this moment to sell and lock in profits.
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These wallets are those that have less than 0.1 btc in their balances. This means that at the high end, these portfolios average $6,000. Within a week, Santiment noted that its collective holdings had decreased by 0.46%.
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twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#bitcoin is dancing just above $66.1k as small traders continue twitter.com/hashtag/liquidate?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#liquidate its properties despite twitter.com/hashtag/crypto?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#crypto rebound during the past week. Historically, small wallets throwing their coins into larger wallets is an encouraging move and twitter.com/hashtag/bullish?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#bullish sign for twitter.com/search?q=%24BTC&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow”>$btc. https://t.co/wlz4XPhfMD pic.twitter.com/dTJAy5G6pL
– Sentiment (@santimentfeed) twitter.com/santimentfeed/status/1792310926634631372?ref_src=twsrc%5Etfw” rel=”nofollow”>May 19, 2024
Selling between smaller portfolios is not new, but at this level it could have a significant impact on the price. However, compared to when whales and sharks sell their btc holdings, sales by retail investors are typically bullish on price. This is because as smaller traders sell, larger traders, who generally have longer-term holdings, collect the btc.
As a Crynet blockchain agency x.com/crynetio/status/1792322341705232822″ rel=”nofollow”>Explain in response to Santiment: “While disinvestment by small merchants may seem worrying, it is often a bullish sign. Historically, this redistribution to larger holders indicates stronger hands in the market. Let’s see how this plays out.”
Bullish sentiment increases among investors
The selling by small bitcoin traders comes amid rising optimism. As Santiment reported in a previous post, optimism among bitcoin investors has now jumped to a 4-month high. The last time investors were this optimistic was in January 2024, when the price of btc jumped above $45,000.
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bitcoin's weighted sentiment now sits at a value of 0.99, and while it is still lower than its January high of nearly 1.8, it is still one of the highest among large caps. Currently, only Chainlink (LINK)'s weighted sentiment is higher after hitting a new one-year high of 1,829.
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The crowd sentiment has changed towards twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#bitcoin after the surprise bounce above $66,000 on Wednesday (and now above $67,200). Besides, twitter.com/hashtag/Chainlink?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#Link of the chain is seeing its maximum twitter.com/hashtag/bullish?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#bullish feeling in more than a year. twitter.com/hashtag/FOMO?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#FOMO staying low will help these increases continue. https://t.co/TcEPBdS9Oh pic.twitter.com/czvE1mOgId
– Sentiment (@santimentfeed) twitter.com/santimentfeed/status/1791506842784526623?ref_src=twsrc%5Etfw” rel=”nofollow”>May 17, 2024
ethereum's weighted sentiment is currently at a low of -0.44, while Binance's XRP and BNB are around -0.37. This suggests that the bearish trend continues to dominate among these assets, while cryptocurrency investors look to bitcoin to lead the market.
At the time of writing, btc price is still trading at a high price of $66,900. The largest cryptocurrency by market capitalization is seeing a rise of 6.78% in the last week and a small drop of 0.5% in the last day, according to data from Coinmarketcap.
Featured image created with Dall.E, chart from Tradingview.com
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