After looking at recent on-chain data, I found an interesting phenomenon. Small retail investors have been continuously buying Bitcoin, and their holding ratio has hit a new high since mid-year, yet the price keeps bouncing repeatedly at the level of more than $74k and has never managed to break through. The reasons behind this are definitely worth exploring.

Santiment’s data shows that the number of “small shrimp” wallets holding less than 0.1 Bitcoin has increased by 2.5%. These retail investors have already been doing their best to support the market. But the issue is that the real players who can drive the market—those whales and sharks holding between 10 and 10000 Bitcoins—have actually been reducing their positions since the October peak. This creates an awkward situation: the small shrimp are buying, while the big players are selling.

Not long ago, when Bitcoin dropped to around $60k, there indeed was a wave of broad bottom-fishing. At that time, Glassnode’s cumulative trend score reached 0.68, the strongest accumulation signal since last November. Back then, medium-sized wallets were especially active. But now, the data shows that these big holders’ net positions have been negative since October—meaning they’ve been distributing every time there’s a rebound.

That explains why the market is so fragile. Small shrimp provide bottom support and short-term momentum, but to form a truly sustained uptrend, participation from big wallets is required. If the big holders keep selling during rebounds, no matter how many retail investors buy, it will be difficult to push prices higher. With Bitcoin stuck at this level, the funding rate for perpetual contracts has been negative for 46 consecutive days, indicating that there are plenty of bearish positions in the market.

Interestingly, historically, risk-averse phases marked by large-scale shorting often foreshadow sharp rallies ahead. So the key is still to watch when the big players will change their stance—either stop selling or start buying. The small shrimp are already here; now it’s just a matter of waiting for the big players to join in.