According to a recent analysis by Alphractal, a notable trend is emerging in the Bitcoin ecosystem, particularly after Tesla announced its investment in Bitcoin. Tesla's participation in this market is not only a standout event in the financial world but also opens a new phase for how major institutions and crypto whales engage with the Bitcoin market.
On February 8, 2021, when Tesla publicly purchased $1.5 billion worth of Bitcoin, this move caused a stir in the global financial community. The reason was not only due to the large sum that Tesla spent on Bitcoin but also because the endorsement of a well-known organization led many to believe that Bitcoin is a safe asset. However, instead of driving long-term accumulation by whales, this event marked a significant turning point in Bitcoin's journey. Since then, the number of wallets holding over 1,000 BTC, which are often associated with large institutions or native whales, has gradually declined.
The unexpected change and new momentum from Bitcoin ETFs
A notable singular sign in this downtrend occurred when spot Bitcoin ETFs were approved at the beginning of 2024. This announcement created a surge in the number of Bitcoin whale wallets over a short period, reflecting increased interest from large investors. However, this upward momentum did not last long. After the initial growth, the number of BTC wallets with balances over 1,000 BTC stabilized without sustainable growth, even though Bitcoin continued to be widely adopted and its value increased.
This raises an important question: Is Tesla's involvement in Bitcoin merely a coincidence in timing, or does it actually mark a significant change in how institutions and large investors approach and participate in the Bitcoin market? A plausible answer could be that this change reflects the development of a more diverse investor base, with many institutions and individuals splitting their assets into multiple addresses for security, privacy, or trading strategy purposes.
Is retail sentiment a swing trading signal?
Although the Bitcoin market continues to grow and attract interest, the stagnation in accumulation by whales has led to a quiet shift in the structure of large Bitcoin holders. Data from Santiment indicates an interesting sentiment trend: retail sentiment, rather than traditional support and resistance levels, may become one of the most reliable swing trading signals in the crypto market.
In a recent report, Santiment analyzed Bitcoin price predictions shared on social media platforms such as X, Reddit, Telegram, 4Chan, and BitcoinTalk. This data categorizes predictions into two main sentiment groups: predictions that Bitcoin's price will range from $30,000 to $70,000 (green) and predictions that Bitcoin's price will reach between $120,000 and $160,000 (red).
Interestingly, over the past three months, Bitcoin's price has never dropped below $70,000, but it has also never exceeded the all-time high of $112,000. Nevertheless, retail discussions often fluctuate between these extremes — from panic selling to aiming for sky-high prices. Experts from Santiment point out that when retail sentiment leans towards bearish forecasts or extreme optimism, the market tends to move in the opposite direction.
A notable example pointed out by Santiment occurred from June 4 to June 6, when Bitcoin dropped to $101,000. At that time, retail sentiment was confused, and many investors predicted further price declines. However, while retail traders were fearful and selling off, whales began accumulating Bitcoin, leading to a strong price recovery. This is clear evidence that trading against the crowd can yield stable profits.
Santiment emphasizes that tracking retail sentiment, rather than solely focusing on traditional price indicators, can provide reliable trading signals. When retail traders begin to make extreme predictions, this may indicate that the market will move in the opposite direction.
The change in the structure of Bitcoin holdings, along with the shift in retail investor sentiment, is creating new opportunities in the market. Data from Alphractal and Santiment shows that, although the involvement of major institutions like Tesla does not necessarily create long-term growth for the market, they contribute to changing the structure of Bitcoin holders and how large investors participate in this market. In this context, tracking sentiment trends and whale movements can provide valuable insights and trading opportunities for long-term and swing traders.