Bitcoin Whales Are Buying the Dip – Should Retail Follow or Step Back?

Bitcoin’s on-chain data is showing a clear split between large holders and small investors. While retail traders were seen taking profits after the early-January rally, whales were moving in the opposite direction. According to data from Santiment, this divergence has historically increased the probability of bullish market conditions.

With Bitcoin trading above $93,000 at the time of Santiment’s data release, many retail investors were observed reassessing their positions by calculating Bitcoin profits following the recent move higher. That reassessment appeared to drive profit-taking among smaller wallets, even as larger holders continued to increase exposure.

Addresses holding between 10 and 10,000 BTC accumulated more than 56,000 coins between mid-December and early January. At the same time, wallets with less than 0.01 BTC started selling, suggesting fear of a short-lived rally rather than a sustained move higher.

Small Bitcoin holders shifted into selling mode when Bitcoin briefly went higher in early January. After Bitcoin pushed above $93,000, many retail investors chose to lock in gains rather than increase exposure.

This behavior reflected growing concern that the recent price strength could be a bull trap. Retail traders appeared skeptical that higher levels would hold, especially after the sharp moves seen in the preceding weeks. As a result, wallets with minimal BTC balances contributed to selling pressure during that period.

Santiment, in the data-packed tweet, noted that this behavior marked a change from mid-December, when retail activity was more mixed and lacked a clear trend. The recently concluded rally seemed to have been the catalyst for profit-taking.