Cryptocurrency analytics firm Alphractal has released a new report indicating that Bitcoin holders with 100 to 1000 BTC, dubbed “The Dolphins,” are the only group currently accumulating Bitcoin. All other address sizes, according to Alphractal, are in a distribution phase, suggesting they are selling their holdings.
The report highlights a significant correlation between the Dolphins’ behavior and Bitcoin’s price action since the end of 2020. “When they accumulate, we see upward price movements, and when they distribute, price declines are observed,” the analysis states. Alphractal posits that this group, rather than larger holders (most of whom are exchanges), represents the true whales or market makers influencing Bitcoin’s price.
At its peak on December 6th, the Dolphins held approximately 344,000 BTC accumulated over a 60-day period. However, the report notes a recent distribution of around 11,000 BTC over the past week, potentially contributing to the recent market volatility. Despite this, Alphractal cautions against prematurely concluding that the accumulation phase is over, emphasizing the importance of continuous monitoring of on-chain metrics.
Alphractal also points to the Spent Output Profit Ratio (SOPR) Trend Signal as a key indicator for potential trend reversals. “Historically, the SOPR Trend Signal has been an excellent metric for evaluating trend changes in Bitcoin’s price,” the report explains. Currently, the metric is nearing a crucial threshold. If the blue line crosses below the orange line on the SOPR Trend Signal chart, it will generate a sell signal. This crossover would suggest that investors have distributed sufficient Bitcoin, and a downward trend is imminent. Alphractal notes that this signal can lag by a few days, meaning the crossover indicates a local top has already occurred, and the price will subsequently follow the new downward trend.
