Whales And Miners In The Bitcoin Ecosystem Are Reacting Differently Under The Bear Market – Here’s How

Whales And Miners In The Bitcoin Ecosystem Are Reacting Differently Under The Bear Market – Here’s How

July 5, 2022
  • Bitcoin addresses of different sizes are expressing diverse sentiments in the wake of declining asset prices.
  • Small addresses are accumulating Bitcoins but are treading tentatively while whales are aggressive in adding to their holdings.
  • Bitcoin fell below $19,000 for the first time in over 18 months to the dismay of investors.

The participants in Bitcoin (BTC) markets are reacting to the challenging market conditions in interesting dynamics. Behaviors of miners, shrimps, and whales to BTC might have the answers to the question of where the asset price might go from here.

The shrimps and the whales

A Glassnode report chronicled the activities of entities in the Bitcoin ecosystem with a specific focus on shrimps, addresses with less than 1 BTC, and whales, addresses with over 1,000 BTC. A common denominator between the two classes of investors shows that they are all taking advantage of the dip to increase their positions.

The Glassnode report noted that the shrimps are upping the ante in their accumulation spree with June being the most aggressive accumulation month for the demographic since March 2020. At the moment, shrimps are adding 36.75K BTC each month and hold a total of 1.12 million BTC in total.

Despite being at the peak of their accumulation cycles, shrimps still pale in comparison to the whales. Glassnode notes that whales are “also adding to their balances aggressively, acquiring 140k BTC/month directly from exchanges.” Onchain reports indicate that the whales hold 8.69 BTC amongst themselves which is 45.6% of the total supply.

Giga-whales, addresses with over 100,000 BTC are the biggest winners in the accumulation spree. According to data from IntoTheBlock, these giga-whales increased their positions by 16% in a 30-day window and controlled 776,000 BTC between the top-five largest addresses.

Miners go through their worst moments

Glassnode notes that miners are not keeping the bulk of their Bitcoins and are in full distribution mode. The report notes that miners are distributing between 3,000 to 4,000 BTC each month and could spike all the way to 8,000.

The capitulation by miners is a result of the stress on miners’ income due to rising production costs and falling revenue from rapidly declining prices. Glassnode made use of the Puell Multiple and Difficulty Ribbon compression tool to deduce that the current stress faced by miners is worse than the Chinese crackdown on mining activities in the summer of 2021.

Glassnode notes that “excluding Patoshi and Unknown miners (balance is flat), miners hold 65.2k BTC in aggregate”. Bitcoin hashrates hit an all-time high of 292.02 EH/s at the start of June in defiance of the falling asset prices plaguing Bitcoin and the wider markets.

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