Based on the accumulation of bitcoin in the addresses, we can define the main actors by accumulation of BTC in the Bitcoin ecosystem, and from there extract useful information for the traders who invest in the short and medium term.
The holders of bitcoin can be divided into different categories based on the amount they have, a possible option is the following:
- Humpback would be those with more than 10,000 BTC, in this category are the great whales and exchanges such as Coinbase, Binance, Kraken. .. which are companies that are in charge of the custody of the bitcoin of others and that allow online purchases and sales of BTC in a simple way from fiduciary money such as the dollar, euro… In general, when this group decreases, the BTC is a bullish sign because it means that users are withdrawing their bitcoin to guard it themselves and thus are not interested in selling, on the contrary, when the amount of BTC in the exchanges rises, it is usually a bearish sign since it indicates that users are sending their bitcoin there with the idea of exchange them for stablecoin or fiat.
- Whale, which would be the ones with between 1000 and 10000 BTC in this group, we have the great hodlers, they usually bought the bitcoin many years ago at a much lower price than the current one, so they have been in the ecosystem for a “long” time they have a knowledge about the fundamentals on which Bitcoin is supported such as that it is a Sound money, which has a defined monetary policy where it is indicated that there cannot be more than 21 million BTC, that new BTC is distributed every 10 minutes to the miner who solves a problem mathematical that consists of performing a SHA-256 on a block of transactions and that the result of a value less than the mining difficulty, today the prize for finding that value is 6.25 BTC and this reward is divided by 2 approximately each 4 years and will continue until the year 2140. These actors, due to the large amount of BTC they have, have caused variations in the price in the short term with their sales and purchases, their possibilities of pert Urbar the market in the medium and long term are very small but in the short term their movements cause high volatility. It must be said that the greater the capitalization there is in Bitcoin, the lower its influence capacity. Whales capital movements are important because they show us what the actors with the most BTC think and tell us where they want to take the price.
- The next group would be the Shark, who are users with an amount of BTC between 100 and 1000, these actors have a large amount of bitcoin, only with their movements they are not able to move the price but their experience in the operation of Bitcoin them leads to normally anticipating movements. You have to look closely at what this group does because they do not usually have the intention of moving the market because they do not have enough capital and what they are looking for is to anticipate the future to make money and be able to accumulate more BTC.
- The next category are the Fish that own between 10 and 100 BTC, these form a heterogeneous group and that could be the middle class of Bitcoin hodlers, there is no single policy under which this group acts, most are hodlers who want keep accumulating BTC and they are not interested in selling, some of them get carried away by what the Whales do, others buy and sell they follow the waves of the market or they do it against the current.
- The following players by the amount of money accumulated are the Crabs that have between 1 and 10 BTC, they are “small” hodlers much more influenced by the fluctuations of the market and many of the movements of the Whales seek to lower the price and the Crabs and The Shrimp sell their bitcoins to buy them at a lower price. Their movements are not usually a good indicator for the price in the short term but together with the Fish and Shrimp they are the ones that make the price continue to rise in the medium and long term.
- And finally we have the Shrimp, who are the holders of less than 1 BTC. This is the most variable group, with less experience and knowledge, most influenced by the FOMO and the FUD, which has shown us in the past that they have tended to buy on the big ups and sell on the downs, often losing money with these movements. .
The tables Bitcoin Distribution Coin and Address
Show us the movements of BTC and addresses, daily, weekly (7 days ago) and monthly (30 days ago) between the different groups and so on know at a glance what is happening in the market.
Example of analysis with the data of May 8, 2021
The data in the table indicates that in the last day BTC is entering the exchanges since the amount of bitcoin held by the Humpback is increasing, which translates into a bearish position since Bitcoin users are sending BTC there with the intention of selling it.
The Whales are selling and have been doing it since the last month but if we contrast this data with the one shown in the Bitcoin Address Distribution table.
We see that the Whales addresses that are lost, which are 9, increase in the Shark which may mean that some Whales are sending their capital to addresses with less amount of BTC.
The Shark are accumulating BTC and have been doing it for the last 30 days, they believe that the lateral and bearish movements of the last 30 days that the price has carried will end in a rise and they prefer to buy now that the price is lower. Today these actors act as traders and they would be giving us a good indicator for Trading.
The Fish have bought in the last day but they have been selling the last 7 and 30 days, the price drops that have occurred in this last month have led them to sell and they begin to change their buying trend, it seems that their strategy is semi wrong how The bad part has been selling in the decline what the Shark have taken advantage of to buy and as a good part they are buying now in anticipation of the coming rise.
The Crabs and Shrimp are acting according to the market, they have been selling on this latest drop and have bought in the high zone of 30 days ago.