- Relatively smaller Bitcoin addresses start accumulating BTC as prices rise.
- Profitability remained low, reducing the likelihood of an imminent sell-off.
Since Bitcoin[BTC] After breaking above $70,000 and then a correction, speculation about what will happen next to the coin has flooded the cryptosphere.
Crabs and fish do the rest
The price of Bitcoin could rise due to the behavior of two different groups of holders known as “crabs” and “fishes”. These terms refer to holders with Bitcoin holdings ranging from 1 to 10 BTC for crabs and 10 to 100 BTC for fish.
Recent observations suggest a possible regime shift among these holders, moving from a phase of distribution to accumulation.
Both crabs and fish recorded the highest accumulation rate since November 2023. Additionally, there is evidence that smaller holders with holdings of 0 to 1 BTC are also joining this accumulation trend, as recent data shows.
While this accumulation expands the investor base, it also concentrates holdings among these mid-tier investors, which could result in more centralized control of the market compared to a scenario with a broader distribution of smaller holdings controlled primarily by whales.
Source: X
There are some challenges ahead of us
However, key metrics suggested that the market may have been overheated, as shown by the bull-bear market cycle indicator. It entered an overheated bull phase and traders maintained high unrealized profit margins.
After that, BTC traders started selling, taking advantage of these increased profit margins. This level of selling had not been seen since May 2019.
Additionally, significant Bitcoin holders intensified their selling activities while miners also started dumping their holdings amid rising prices.
Source: X
These factors could negatively impact BTC’s journey above the $70,000 mark. At press time, BTC was trading at $64,749.87 and its price had fallen by 3.44% in the last 24 hours.
Realistic or not, here is the market cap of BTC in ETH calculations
Interestingly, the MVRV ratio remained low, indicating that many holders were still not making a profit. The low MVRV ratio suggested that the current price increase may have been caused by new entrants who have not yet made profits.
This makes BTC much more likely to reach $70,000 as no profit is possible at current levels. However, sentiment could change if prices rise above $70,000 and the probability of a correction would also increase.
Source: Santiment
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