Here’s what’s been happening between retailers and whale Bitcoin holders, and why the difference in their behaviours could be bad for BTC.
The latest Bitcoin activity shows a clear difference between how retail buyers and large holders are behaving.
As it stands, this divergence could be a disaster waiting to happen.
Whales and Retailers Show Divergent Behaviour
Data from Santiment shows that smaller traders have added to their positions while whales reduced their holdings over the past month. This split has drawn attention since it happened after the recent market pullback.
Bitcoin slipped from highs near $115,000 in mid-October to lows around $98,000 at the start of November. The move created interest among retail traders who saw the drop as an entry point.
Santiment reported that wallets holding between 10 and 10,000 BTC sold more than 32,000 BTC during that same period. Retail wallets moved in the other direction and bought heavily throughout the decline.
Warnings Over Retail Buying Patterns
Santiment flagged this split as a warning because earlier cycles show that price action aligns more closely with whale activity.
Large holders tend to influence the market more than smaller traders due to the size of their positions. The firm noted that the pattern can create short-term pressure when whales take profits or rotate out of positions.
Bitcoin has since climbed back above $100,000 as conditions settled. The partial recovery has not changed the gap between cohorts and Santiment described the setup as a major divergence that deserves attention.
The firm’s analysts said that situations where whales sell while retail wallets buy have often been a sign of stress, even though outcomes can vary from cycle to cycle.
Another Layer In Current Market Conditions
Bitfinex analysts shared a more balanced view of the situation. They noted that Bitcoin may face choppy trading rather than a strong push toward new highs.
They pointed to multiple pieces of recent market activity that affected price behaviour over the past few weeks. ETF inflows lifted Bitcoin toward 125,000 dollars earlier in October.
Mid-month macro news, a large options expiry and profit-taking then sent it lower.
Spot Bitcoin ETFs also showed weakness during a six-day outflow streak that reached about 2 billion dollars. The streak ended late last week after fresh inflows eased the pressure.
Farside data showed that the pattern broke on Friday.
Bitfinex analysts said that Bitcoin could approach $130,000 if weekly ETF inflows return to levels above $1 billion and general economic conditions improve. Their view also depends on both factors changing at the same time since neither alone guarantees a break higher.
Retail Participation Grows As Traders React To Price Swings
Retail involvement grew as Bitcoin swung over the past month. Many smaller traders decided to add exposure as the price pulled back, which matched earlier cycles where dips attracted attention from newcomers and small holders.
Santiment pointed out the speed of this buying activity and how different it was from whale behavior.
The report pointed out that retail traders often try to take advantage of short-term price weakness.
Their approach does not always line up with larger holders who adjust their positions based on liquidity or longer time frames. This, therefore, creates situations where two groups push in opposite directions.
At the end of the day, BTC enters a phase of sideways trading or extended consolidation.