Bitcoin Retail Buying Spikes, Adoption Accelerating?
On-chain data shows that Bitcoin retail investors have been aggressively buying the asset recently, a sign that adoption could accelerate.
Bitcoin Shrimps have been accumulating aggressively lately
According to data from on-chain analytics firm glassnodeonly 116 days in the entire history of the cryptocurrency have seen stronger accumulation from retail traders.
The relevant indicator here is the “net position change”, which measures the net amount of Bitcoin entering or leaving the wallets of a specific group or group in the market per month.
When the value of this metric is positive, it means that a net number of coins are entering the wallets of the group in question. This trend could be a sign that the cohort is currently piling up.
On the other hand, negative values of the indicator suggest that these investors are currently transferring coins from their portfolios. Such a trend implies that the group is currently selling.
Now, in the context of the current discussion, the cohort of interest is the shrimp group, which contains entities that have less than 1 BTC in their wallet balances.
Here is a chart showing the trend in total Bitcoin supply held by Cameroon, as well as the cohort’s net position change, over the last few years:
The values of the metrics seem to have risen in recent days | Source: Glassnode on Twitter
As shown in the chart above, the total amount of Bitcoin held by Cameroon rose sharply for a while and reached a value of around 1.29 million BTC. This means that these investors are constantly buying more.
The uptrend has been especially rapid recently as the shift in the position of the shrimp net shows a large spike. At the current value of the indicator, coins are moving towards the supply of shrimp at a rate of around 37,000 BTC per month.
The chart also shows the curve for the number of trading days that have seen spikes in the shrimp net position change more than the current one.
It appears that only 116 trading days in the asset’s entire history have seen the indicator record a higher value. This implies that shrimp have been accumulating at a historically aggressive pace recently.
Since members of the shrimp cohort own such a small amount of Bitcoin, these investors are likely to be retail traders. This means that growth in shrimp supply could give a clue to retailers’ activity.
As the shrimp cohort has grown rapidly recently, it seems reasonable to assume that cryptocurrency has seen a lot of adoption lately. New adoption is generally constructive for the coin, as new network users can provide a more sustainable basis for long-term price movements.
At the time of writing, Bitcoin is trading around $28,200, up 5% over the last week.
Looks like BTC has been moving sideways recently | Source: BTCUSD on TradingView
Featured Image of Kanchanara from Unsplash.com, Charts from TradingView.com, Glassnode.com