Large Investors Resume Buying While Smaller Traders Remain Cautious
Bitcoin is showing signs of renewed investor interest, with large-volume traders leading the way as smaller buyers remain hesitant after weeks of price declines. Data from on-chain analytics platform CryptoQuant suggests that sell-side pressure from Bitcoin whales on Binance is cooling, hinting at a potential market rebound.
Whale Activity Points to Shifting Market Sentiment
Bitcoin’s recent dip to the $80,000 mark appears to be attracting large investors, or at least discouraging major sell-offs among existing whale holders. Analysis from CryptoQuant contributor Darkfost indicates that the proportion of the top 10 largest Bitcoin inflows to Binance attributed to whales has been declining.
“Monitoring whale behaviour has consistently provided valuable insights into potential market movements,” Darkfost noted in a blog post on March 12. “Given that Binance handles the highest volumes, analysing the Bitcoin exchange whale ratio on Binance provides a good insight into broader whale activity.”
Bitcoin exchange whale ratio (Binance). Source: CryptoQuant
Since mid-January, when Bitcoin reached its latest all-time high, Binance’s whale ratio has been trending downward. This suggests that large investors are reducing their selling pressure.
“Currently, this ratio is declining, implying that Binance’s whales are reducing their selling pressure,” Darkfost added. “Historically, an increasing ratio has been associated with short-term price corrections or consolidation phases, while a decreasing ratio has often preceded bullish trends. If this trend of diminishing selling pressure continues, it could help end the current correction and potentially signal a market rebound.”
On-chain data also shows that both whales and larger holders with at least 10 BTC have started accumulating more Bitcoin this month, though at a cautious pace.
Smaller Investors Hesitate as Market Uncertainty Grows
Despite increased whale activity, overall demand for Bitcoin remains subdued. Analysts suggest that smaller investors are hesitant to enter the market at current price levels.
In its latest newsletter, The Week Onchain, analytics firm Glassnode pointed to weak demand from short-term holders (STHs) – investors who hold Bitcoin for up to six months. The firm’s analysis of capital flows within this group shows that recent buyers, particularly those holding Bitcoin for one week to one month, now have a lower cost basis than those holding for one to three months.
“With Bitcoin prices dropping below $95,000, this model also confirmed a transition into net capital outflows, as the 1w–1m cost basis fell below the 1m–3m cost basis,” Glassnode researchers explained.
Bitcoin STH capital inflows (screenshot). Source: Glassnode
The shift suggests that market uncertainty is discouraging new investments, leading to reduced inflows and increasing the likelihood of further selling pressure.
“This reversal indicates that macro uncertainty has spooked demand, reducing new inflows and arguably increasing the probability of further sell pressure and a prolonged correction. This transition suggests that new buyers are now hesitant to absorb sell-side pressure, reinforcing the shift from post-ATH euphoria into a more cautious market environment,” Glassnode added.
Bitcoin’s Next Move Hinges on Market Confidence
With Bitcoin hovering around the $80,000 mark, the market remains at a critical juncture. While large investors appear to be positioning for a potential rebound, smaller traders are holding back due to concerns over further price declines.
If the trend of decreasing sell pressure from whales continues, it could provide the foundation for renewed bullish momentum. However, unless broader demand picks up, Bitcoin may remain in a consolidation phase in the near term.
