This seems very much like a “flight to safety” that large investors are taking. In any event, since dominance is calculated in relation to Bitcoin’s price, it has shot much higher since the price has been in the $18,000 to $20,000 range (as of the week of October 5)

Whales Accumulate, Smaller Holders Begin Distribution

One of the clearest indications of this change in Bitcoin’s market dynamics comes from the actions of the large holders, often called “whales.” Data show that the large holders of Bitcoin, those with more than 10,000 BTC, briefly hit an ideal accumulation score of about 1.0 at the beginning of the month. An accumulation score of 1.0 would suggest very intense buying activity over a period of about 15 days, with these large Bitcoin holders capitalizing on market dips to acquire even more Bitcoin. However, since then, that accumulation score has eased back to around 0.65. To be clear, 0.65 is still a signal that’s way above what we would consider a neutral zone and still suggests that these large holders are acquiring Bitcoin.

In stark contrast, smaller holders—those holding less than 1 BTC up to 100 BTC—have been increasingly distributing their holdings. These holders have seen a trend toward lower accumulation scores, hovering between 0.1 and 0.2, reflecting their tendency to sell into the market downturn. This clear divergence between large and small holders indicates that whales continue to see Bitcoin as a store of value in times of market stress, while smaller investors are either losing confidence or seeking to lock in profits by exiting their positions.

The divide in sentiment that is growing between different types of investors is highlighted by the contrasting behavior of large and small holders. While it is likely that the whales are seeing Bitcoin as a safe haven during these times of global uncertainty, the small holders might not be too confident in the volatility of the space right now and might be reducing their overall exposure to digital assets.

Bitcoin ETFs Face Significant Outflows

A different indicator of changing market sentiment involves Bitcoin spot exchange-traded funds (ETFs). Between March 31 and April 4, Bitcoin spot ETFs took a notable net outflow of $173 million. The larget outflow came from Grayscale’s Bitcoin Trust ETF (GBTC), which saw a weekly net outflow of $95.48 million. These developments mark a considerable retreat from Bitcoin investment products. The situation seems to be this: As the overall market slump continues, institutional investors and traders are using the opportunity to withdraw their exposure to Bitcoin.