Bitcoin (BTC) On-Chain Analysis – Who Are the Current Bitcoin Buyers and Sellers?

Bitcoin sends mixed signals

Bitcoin (BTC) price maintains its short-term bullish momentum. Testing the upper bound of the range ($19k – $22k) as support, the price gives hope for a recovery although the underlying trend remains bearish.

Given theon-chain activity under regimeof the recent spending by long-term investorsof the increase in speculative risk and of short-term momentum reversal, the market today is saturated with contradictory signals.

Figure 1: Daily price of BTC

So, in order to let the current movement settle, this week’s analysis will focus on the buying and selling dynamics of the various geographic market areasthen on the triptych Individuals – Traders – Whales, in order to answer the following question:

” Who are the current buyers and sellers? »

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Geographical market areas

Introduced by Glassnode in March 2022, a series of metrics that track cumulative price movement during trading hours in the US, Europe and Asia provides an overview of which geographies are leading or lagging in terms of market pressure.

They make it possible to observe the reactions of the various actors structural changes in the market and the price action of BTC.

Triptych composed of United States (in orange)of the’European Union (in blue) and of Asia (in green)these metrics with heterogeneous fluctuations currently indicate that the overall behavior is to buy, although the Asian market shows a slight bearish bias.

Figure 2: Geographical market areas

Starting by observing the buying/selling behavior of the US markets, it appears thatthey accumulated strongly during the rise in early 2021 before slowing along with the price of BTC.

They give way from May to July 2021 by making record sales, then reaccumulate quickly during the recovery in September, before limiting their purchases (blue arrow) from November 2021 until July 2022.

note that North American markets dominate the sell-off following the fall in price caused by the collapse of the Terra/LUNA ecosystemfrom May to June, before adopting a mixed behavior, between hot and cold, during the decline bringing the price of BTC to current levels.

Currently, the United States is leading the way by applying moderate buying pressure in the market.

Figure 3: Change in the position of the US markets

Globally, the European Union seems to follow the behavior of their counterparts across the Atlanticalbeit adopting a less intense approach.

Following the US accumulation at the start of 2021, Europe increases its exposure to the March and April highs, but still sells moderately during the period from May to July 2021.

Inducing little buying pressure on the rally carrying BTC towards the ATH of $69k, European markets adopt a moderate behavior, sometimes bullish, sometimes bearish, with relatively low proportions.

Selling gradually in May 2022, Europe eases its downside pressure during the month of June (yellow arrow), before cautiously following the long bias of the United States since last week.

Figure 4: Changing position of European markets

Asian markets have their own dynamicsometimes running counter to Western markets.

In effect, Asia only participates late in the rise at the start of 2021 and induces limited selling pressure during the decline from May to July 2021.

Leading the buying at the edge of the November ATH, Asia turns around and sells at record highs in late 2021, before repeating this behavior in May 2022, capitulating further in July.

Current positions in Asian markets are still short, although the extent of their downside pressure has diminished.

With a negative overall performance, theasia seems to be the geographical area that has suffered the most over the past two years.

Figure 5: Changing position of Asian markets

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Small hands accumulate, big hands distribute

Let us now qualify this study by analyzing three cohorts of participants based on their BTC holdings.

By leveraging Glassnode’s heuristics, we can gain insight into how many entities have between 0.001 BTC and 1 BTC on the chain.

This cohort, named “Individuals” or sometimes “Shrimp” represents the entities with small amounts of BTC and not having a professional activity sale / purchase / custody of bitcoins.

Figure 6: Offer held by Individuals

Looking at the graph above, it is clear that the cohort of small portfolios exhibits a strong accumulative behavior throughout the last few years. Note that current price levels are particularly attractive to these entities.

The second cohort, presented below, is it “Tradespeople”. Composed ofentities holding between 1 and 1000 BTCthis group brings together some large individual fortunes but especially businesses, having custody of large sums of bitcoins, for themselves or for their customers.

Picture 7 : Offer held by Merchants

Despite behavior that is more sensitive to market movements, holdings of this cohort are on a long-term uptrend, which has also accelerated since May.

Finally, the cohort holding more than 1000 BTCbringing together the entities known as “Whales” or “whales” has the opposite behavior to the previous two.

After profit taking at the highs of March and April 2021, the supply held by this cohort increased slightly before showing distributor behavior from November 2021.

Picture 8 : Offer held by Les Baleines

This momentum then intensified until it reached a distribution peak in June and July 2022. Thus, it seems that this cohort has largely participated in the sales pressure and the process of redistributing supply over the past two years.

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Summary of this onchain analysis

In short, the data of this week indicate that significant differences in behavior exist between the different geographic market areas.

American markets, aggressive bettors, are often the first to buy a rise and to slow down when the movement fades. This does not prevent them from realizing significant losses as during the capitulation from May to July 2021.

The European Union holds the role of moderate follower, following the trends of the US but with a controlled extent.

On the other hand, Asian markets often behave at odds with Western markets.with a negative overall performance.

Moreover, the study of cohorts of holders according to their holdings allows us to determine that individuals and merchants engage in major hoarding behaviorwhile the whales tend to distribute, actively participating in the distribution of capital.

Sources – Figures 2 to 8: Glassnode

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