Smart money allocated to Bitcoin caused panic last week. Then it sold the rally to everyone else.
According to Santiment, whales held between 10 and 10,000 Bitcoins, accumulating the bulk between February 23 and March 3, when Bitcoin was trading between $62,900 and $69,600.
That window covered the worst of the Iran war selloff and the early stages of the recovery. When Bitcoin reached $74,000 on Thursday, those same wallets started turning profits and have since sold about 66% of what they bought.
Wallets holding less than 0.01 BTC continued to add to their positions as Bitcoin slipped below $70,000 on Friday and Saturday. This is a classic pattern sentiment that has been flagged as a warning signal. “When retail buys while whales sell, it generally signals that the correction is not over yet,” the firm said in a weekend note.
Glassnode data complicates the problem. About 43% of Bitcoin’s total supply is now in losses, with every push going to sellers who have been underwater for weeks or months and are looking to break-even rather than ride the rally. That’s exactly what happened at $74,000, as the surge ran into a wall of supply from both whales taking profits and holders exiting on a cost basis.
Meanwhile, the widely tracked Crypto Fear and Greed Index fell 6 points on Saturday to 12, deep in “extreme fear” territory. This is one of the lowest readings since the October crash.
The broader picture is of a market that continues to produce impressive intra-week moves that go nowhere on a monthly basis. Bitcoin reached $60,000 on February 6. On March 5, it reached $74,000. It now stands at $68,000, roughly where it was three weeks ago.
Volatility is very high but the net movement is close to zero, which is when each rally is sold by holders looking for an exit and each decline is bought by retail chasing a bounce.
That dynamic resolves in one of two ways. Either the selling ends, the underwater supply is absorbed, and Bitcoin breaks above $74,000 with conviction. Or the buying dries up, retail capital runs out, and the $60,000 floor gets tested for real.
The behavior of whales this week suggests that large holders are betting on whales.