Last week, smart money allocations to Bitcoin sparked panic. Then it sold the rally to everyone else.
According to Santiment, whales holding 10 to 10,000 Bitcoins accumulated significantly between February 23 and March 3, when Bitcoin was trading between $62,900 and $69,600.
This window covers the worst of the Iran War sell-off as well as the early stages of the recovery. When Bitcoin hit $74,000 on Thursday, these wallets began taking profits and had sold off approximately 66% of what they had just purchased.
As Bitcoin fell back below $70,000 on Friday and Saturday, wallets holding less than 0.01 BTC have been steadily adding to their positions. This is a classic pattern that Santiment flags as a warning sign. “When retail traders buy and whales sell, it’s usually a sign that the correction is not over yet,” the firm said in a weekend note.
Glassnode data compounds the problem. About 43% of the total Bitcoin supply is currently in the red, and every price increase is met with sellers who have been underwater for weeks or months looking to break even rather than ride the wave. That’s exactly what happened at $74,000, as the rally ran into a supply wall of whales taking profits and holders getting priced out at cost.
Meanwhile, the widely tracked Crypto Fear and Greed Index fell 6 points to 12 on Saturday, sinking deep into “extreme fear” territory. This is one of the lowest readings since the stock market crash in October.
The broader picture is that the market continues to produce impressive intra-week moves but goes nowhere month by month. Bitcoin hit $60,000 on February 6. It hit $74,000 on March 5. It’s now $68,000, roughly where it was three weeks ago.
Volatility is high, but net volatility is close to zero, which happens when holders want to exit on every rally and retail investors chase the rally on every dip.
This dynamic can be resolved in one of two ways. Either the sell-off exhausts itself, or the underwater supply is absorbed, Bitcoin will move firmly above $74,000. Or purchasing power runs out, retail money runs out, and the $60,000 base price will be truly tested.
The behavior of whales this week suggests that big holders are betting on the latter.
