Retail Investors Buy Bitcoin, But Whales Hold Key to Rally
By John Nada·Feb 21, 2026·6 min read
Retail investors are increasing Bitcoin holdings, but large holders are selling. The participation of whales is crucial for a sustainable price rally.
Small investors have increased their Bitcoin holdings by 2.5% since October's all-time high, while large holders have trimmed theirs by 0.8%, according to Santiment data. This divergence in ownership dynamics could significantly influence Bitcoin's price trajectory moving forward.
The number of wallets holding less than 0.1 BTC, typically associated with retail investors, has reached its highest level since mid-2024. This increase in smaller wallets indicates a growing interest among everyday investors, who often view Bitcoin as a hedge against inflation and a store of value. In contrast, larger holders, often referred to as whales and sharks, have decreased their positions, signaling a potential imbalance in market momentum. Historically, it is these larger players who set the tone for price direction, making their actions critical for sustained rallies.
The market's recent behavior reflects a complicated narrative. Following a significant price drop to around $60,000 earlier in February, smaller investors appeared to have begun accumulating aggressively. This influx of retail investment can be interpreted as a bullish sentiment among those who believe in Bitcoin's long-term potential. Meanwhile, larger holders continued to distribute their assets, indicating a lack of confidence or willingness to drive prices higher. This situation is particularly concerning because it suggests that while retail investors are ready to support Bitcoin, the market requires the participation of larger holders to create a solid upward trend.
For a rally to succeed, the whales need to join in. The divergence in behavior between small and large investors is especially notable because the picture looked different just a few weeks ago. After Bitcoin cratered toward $60,000 on February 5—a drawdown of more than 50% from its October peak—Glassnode's Accumulation Trend Score climbed to 0.68, the strongest broad-based reading since late November, as CoinDesk reported earlier in the month. This metric measures the relative strength of accumulation across different wallet sizes by factoring in both entity size and the amount of BTC accumulated over the past 15 days. A score closer to 1 signals accumulation, while a score closer to 0 indicates distribution.
During this price drop, it was the 10-to-100 BTC cohort that emerged as the most aggressive dip buyers. This cohort's actions suggested that the market was shifting from capitulation into something more synchronized, as they were willing to buy the dip even as larger holders were selling. This dynamic highlights the potential for smaller investors to provide a floor for Bitcoin's price, offering short-term momentum but not necessarily the structural demand needed for a sustained rally.
The divergence in ownership dynamics is further complicated by Santiment's broader lens. It captures a much larger slice of holders, with wallets containing between 10 and 10,000 BTC. Across this full range, net positioning since October remains negative, indicating that while smaller wallets may have been buying, the larger holders have been selling into any recovery. This trend raises crucial questions about Bitcoin's price stability moving forward.
The relationship between retail and large investors is critical for understanding Bitcoin's market dynamics. Retail investors, dubbed 'shrimps,' are currently doing their part by increasing their holdings. However, the market's success hinges on whether the whales can be persuaded to stop their distribution activities. Without a reversal in the selling pressure from large wallets, any rally risks being short-lived, as these larger holders may choose to sell into price increases rather than support further growth.
The increasing number of small wallets holding Bitcoin suggests a growing base of retail investors who are not only interested in the asset but are also willing to hold it for the long term. This demographic shift could be indicative of a broader acceptance of Bitcoin as a legitimate investment vehicle. As more individuals participate in the market, the potential for Bitcoin to reach new heights increases, provided that the larger holders do not impede this progress.
Bitcoin's recent price movements, hovering around the mid-$60,000s, reflect a phase of stabilization amidst volatility. Traders and analysts are observing these fluctuations closely, noting that price action has become choppy and frustrating rather than producing clear trends. This choppiness is often a sign of a market struggling to find direction, caught between the buying pressures of retail investors and the selling pressures from larger holders.
The market's current state underscores the importance of monitoring institutional participation. Historically, large holders have played a significant role in determining market sentiment and price movements. Their actions can create ripples throughout the market, influencing not only Bitcoin's price but also the broader cryptocurrency landscape. As such, the divergence in behavior between retail and large investors is not just a local phenomenon; it reflects the ongoing evolution of the cryptocurrency market as a whole.
Moreover, Bitcoin's resilience in the face of external pressures, such as regulatory scrutiny and macroeconomic factors, is a testament to its underlying strength. As Bitcoin approaches significant price levels, the reactions from both retail and institutional investors will be critical in shaping the asset's trajectory. Understanding this interplay can provide valuable insights into future price movements and market dynamics.
In recent news, Bitcoin has been showing signs of recovery, climbing toward $68,000 despite external pressures, including a recent 10% global tariff imposed by former President Trump. This resilience indicates that retail investors are willing to support the asset even in the face of uncertainty. The CoinDesk 20 Index also saw a rise of 2.5%, with altcoins like BNB, DOGE, ADA, and SOL leading the gains. This uptick may signal a broader market recovery, but it is essential to remain cautious, as traders suggest that prices may remain rangebound without significant macroeconomic catalysts.
The narrative surrounding Bitcoin is shifting, with retail investors increasingly stepping into the spotlight. Their growing presence in the market could lead to a new phase of Bitcoin's evolution, but the participation of larger holders remains a pivotal element. As retail investors continue to accumulate Bitcoin, the hope is that larger players will eventually recognize the potential for a sustained rally and adjust their strategies accordingly. Until then, the market will continue to grapple with the complexities of ownership dynamics, navigating the delicate balance between retail enthusiasm and institutional caution.