The Bitcoin price recovery above the $67,000 level has triggered a round of selling, but it is not from the usual camp of large investors selling. This time around, it is the small-time traders who are offloading their bags and putting selling pressure on the price. However, this is not an entirely bad thing given that, historically, such selling has been bullish for the Bitcoin price.
Bitcoin Retail Are Dumping Their Bags
In a report on X (formerly Twitter), the on-chain data tracker Santiment revealed an interesting trend among small-time Bitcoin investors. As the price of Bitcoin rallied past $67,000 over the weekend, these small wallets took this as the time to sell and secure profit.
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These wallets are those holding below 0.1 BTC on their balances. This means that at the high end, these wallets are holding an average of $6,000. In the space of one week, Santiment notes that their collective holdings had dropped 0.46%.
🐟👋 #Bitcoin is dancing just above $66.1K as small traders continue to #liquidate their holdings despite the #crypto bounce over the past week. Historically, small wallets dumping their coins to larger wallets is an encouraging and #bullish sign for $BTC. https://t.co/wlz4XPhfMD pic.twitter.com/dTJAy5G6pL
— Santiment (@santimentfeed) May 19, 2024
Selling among smaller wallets is not new, but at this level, it could have a significant impact on the price. However, compared to when whale and sharks sell their BTC holdings, retail investors selling is usually bullish for the price. This is because as the smaller traders sell, the BTC is picked up by the larger traders, who are usually longer-term holdings.
As blockchain agency Crynet explains in a response to Santiment: “While small traders divesting might seem concerning, it’s often a bullish signal. Historically, this redistribution to larger holders indicates stronger hands in the market. Let’s see how this plays out.”
Bullish Sentiment Rises Among Investors
The selling by small Bitcoin traders comes amid a jump in bullishness. As Santiment reported in a previous post, bullishness among Bitcoin investors has now jumped to a 4-month high. The last time that investors were this bullish was back in January 2024 when the price of BTC had jumped above $45,000.
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Bitcoin’s weighted sentiment is now sitting at a value of 0.99, and although this is still lower than its January high of almost 1.8, it remains one of the highest among large caps. Currently, only the Chainlink (LINK) weighted sentiment is higher after rising to a new one-year high of 1.829.
🥳 The crowd’s sentiment has shifted toward #Bitcoin after the surprise bounce above $66K Wednesday (and now above $67.2K). Additionally, #Chainlink is seeing its most #bullish sentiment in over a year. #FOMO staying low will help these rises continue. https://t.co/TcEPBdS9Oh pic.twitter.com/czvE1mOgId
— Santiment (@santimentfeed) May 17, 2024
The Ethereum weighted sentiment is currently sitting at a low -0.44, while XRP and Binance’s BNB are sitting at around -0.37. This suggests that bearishness continues to dominate among these assets while crypto investors look to Bitcoin to lead the market.
At the time of writing, the BTC price is still trading at a high price of $66,900. The largest cryptocurrency by market cap is seeing a 6.78% increase in the last week and a small decline of 0.5% in the last day, according to data from Coinmarketcap.
Featured image created using Dall.E, chart from Tradingview.com
