Small holders are hoarding; is BTC heading to $70,000 again?

Ever since Bitcoin (BTC) broke through the $70,000 mark and pulled back, speculation surrounding what will happen next for the coin has flooded the crypto space.

Crab and fish eating pie

The price of Bitcoin is likely to increase due to the actions of two different groups of holders, the Crab and the Fish. These terms refer to Bitcoin holders who hold crabs between 1 and 10 BTC and fish between 10 and 100 BTC.

Recent observations suggest that there may be a regime change among these holders, moving from a distribution phase to an accumulation phase.

Both crabs and fish experienced their highest accumulation levels since November 2023. Furthermore, there are signs that even small holders of 0 to 1 BTC are joining in this accumulation trend, as evidenced by recent data.

While this accumulation broadens the investor base, it also concentrates the holdings of these mid-level investors, which can lead to more concentrated control of the market than if smaller holdings were more widely distributed and were primarily controlled by whales. .

Some challenges ahead

However, key indicators suggest that the market may be overheated, as evidenced by the bull and bear market cycle indicators. Entering an overheated bull market phase, traders maintain high unrealized profit margins.

Bitcoin traders have since started taking advantage of these higher profit margins by selling. Since May 2019, there has never been a sale of this scale.

Additionally, significant Bitcoin holders stepped up selling activities, while miners also began dumping their Bitcoin holdings amid the price surge.

These factors could negatively impact BTC’s journey past the $70,000 mark. At press time, BTC was trading at $64,749.87, down 3.44% in the past 24 hours.

Interestingly, the MVRV ratio remains low, meaning many holders are still unprofitable. A lower MVRV ratio suggests that the current price increase may be caused by new entrants who are yet to see profits.

This makes it more likely that Bitcoin will reach $70,000, as profits are impossible at current levels. However, as the price rises above $70,000, market sentiment may change and the likelihood of a pullback increases.