Behavioral Comparison Group: Whales vs. Retail Investors, Long-Term Holders vs. Short-Term Speculators
Data Detective 🕵️: @lindazhengzheng
The price fluctuations of Bitcoin (BTC) are always elusive, but the BTC stock data from exchanges can provide us with a window to peek into market trends. The stock includes inflow and outflow, and behind this capital are different types of players in a game: whales and small retail investors, long-term holders (LTH) and newcomers who entered within the last six months.
Our goal is clear—escaping peaks and bottom fishing to earn profits. The method is also simple: follow smart money, avoiding the FOMO (chasing prices) and FUD (panic selling) of retail investors. This article will break down the behavior patterns of these players and summarize a set of actionable strategies.
Large Holders vs. Retail Investors: A Game of Behavioral Contrast
In the market, the behavior of whales and retail investors is almost oppositional. Whales tend to retreat earlier; when the market starts to get noisy, media news floods, and market sentiment is high, they have already quietly sold off gradually at high positions. Retail investors, on the other hand, act completely differently: when the market is quiet, they hesitate, fear, and even dare not enter; by the time institutions and media create momentum and prices surge rapidly, they become impulsive and chase high prices.
Data provides us with more intuitive evidence.
Taking whales with holdings over $10 million as an example, from April 2023 to November 2024, their participation increased from 30% to 62%, a period corresponding to steady BTC price rises. (Source: @Murphychen888)
However, when BTC breaks through $100,000, the participation of whales starts to decline, from 62% in November 2024 to 38% in February 2025. What does this mean? Whales are reducing their holdings at high positions, while retail investors may still be blindly chasing the price. This behavioral difference is the first clue for us to formulate strategies.
2. Long-Term Holders vs. Short-Term Holders: Rhythm Determines Victory or Defeat
In addition to the game between large holders and retail investors, the operational rhythm of long-term holders (LTH) and short-term holders (speculators) is also worth noting. LTH usually sell gradually during the process of BTC rising, rather than waiting until the peak to take action. Their selling is dispersed and planned. In contrast, short-term holders are completely different—they accelerate their accumulation rapidly when prices rise quickly, showing typical FOMO behavior.
A key observation point is that when the buying volume of short-term holders (red line) peaks, the holdings of long-term holders (blue line) often drop to their lowest point, indicating significant withdrawal. For example, at the moment when BTC price is close to the top, the blue line of LTH (holding volume indicator) will hit bottom. When the price experiences a sharp drop after reaching the peak, LTH will begin to accumulate at lower levels again. This rhythm difference reveals a fact: LTH is more like a calm hunter, while short-term holders are emotion-driven followers.
For us 'market detectives', the strategy is clear: follow the accumulation of LTH, but do not synchronize completely—because they entered too early, the consolidation period may last for a long time. A better choice is to wait for market sentiment to stabilize, plan ahead before the FOMO of short-term holders peaks, while exiting before their panic selling.
3. Cross-Verification: Smart Money is Not One-Size-Fits-All
However, just focusing on LTH is not enough. Not all long-term holders are smart money; some are just passive holders of 'long-term vegetables,' who have endured the bear market for too long and are eager to sell as soon as the bull market begins (for example, in January 2024). For instance, after a long bear market, when the market just turns bullish, LTH may be the first group to sell heavily, carrying an emotion of 'finally breaking free.' In this case, looking solely at the actions of LTH may lead to misjudgment.
Therefore, we need more indicators for cross-verification. In addition to changes in LTH holdings, we should also pay attention to the reduction pace of whales, the FOMO level of short-term holders, and even the overall capital flow in the market. For example, in the BTC stock data on March 26, 2025 (today), if whales continue to reduce their holdings while retail investors' buying enthusiasm is rising, this may be a sign of a peak. Conversely, if LTH begins to accumulate at lower levels, whales' selling pressure decreases, and the panic selling of short-term holders approaches its end, that may be the right time to bottom fish.
4. The Detective Principle of Escaping Peaks and Bottom Fishing
Based on the above analysis, we can summarize a set of highly practical rules to help us achieve peak escaping and bottom fishing in the BTC market:
Focus on LTH accumulation, but follow up slightly later.
The low-position accumulation of LTH is a signal for the start of a bull market, but they entered too early, and the consolidation period may be long. It is better to act once market sentiment stabilizes slightly, avoiding early fluctuations and catching the trend's tailwind.
Stay ahead of short-term FOMO.
The peak buying of short-term holders often accompanies market tops. When seeing a sharp increase in their buying volume, especially when paired with media hype, prepare to reduce positions rather than chase high prices.
Whales reducing holdings + retail chasing high prices = peak warning.
When the participation of whales decreases (for example, from 62% to 38%), while retail investors are still crazily accumulating, a peak may not be far off. Combining with the retreat actions of LTH, the chances of escaping peaks are higher.
Cross-verify multiple indicators to avoid single-point errors.
The behaviors of LTH, whales, and short-term holders should be analyzed comprehensively. A single indicator may have blind spots; only through multiple confirmations can we improve the accuracy of our judgments.
Conclusion:
The BTC market is a game where smart money and large holders have already left traces in the stock data. Although the emotional operations of retail investors occupy the majority of the market, it is precisely this 'human nature' that gives us opportunities for contrarian operations.
Today is March 26, 2025. BTC data—Are the whales moving? Did LTH accumulate? Have short-term holders sold off at high prices? The answers lie in the data, which moves ahead of the price. Follow the data detective 🕵️ to avoid getting lost in trading~
