A recent report published by OKEx, famous for cryptocurrency trading, said that retail investors chased the price of Bitcoin when it was trending higher in the past few months.
In contrast, bitcoin whales and institutional investors were making profits and buying dips.
Individual traders chase the price while the big traders are taking profits:
OKEx has partnered with blockchain data analytics company Kaiko to analyze data from the most used trading pairs in OKEx, the BTC / USDT trading pair.
The two companies tracked the performance from August 1, 2020, to November 30, 2020.
They have divided trading activities into several different categories, and these categories include the following:
Transactions under 0.5 Bitcoin, between 0.5 Bitcoin to 2 Bitcoin (retail or retail traders)
Between 2 Bitcoin to 5 Bitcoin (Professional Traders)
Between 5 Bitcoin and 10 Bitcoin, and 10 Bitcoin or more (whales, or institutional investors)
Despite the insistence that orders containing 10 or more bitcoins come from major traders, whales, and institutions, the report acknowledged that it is difficult to distinguish between them given that there are no strict limits for these types of traders.
However, the behavior of individual traders appeared fairly clear during this period when Bitcoin's value nearly doubled.
The table below, which shows the trend by month, shows that small investors continued to place orders in October and November, despite the price increase.
An excerpt from the report includes:
Individual traders mostly continued to increase their trades during the price hike.
On the other hand, major whale and institutional traders pooled the bulk of Bitcoin at around $ 10,000 and decided to take profits during this rally.
Traders' behavior during a dip:
A few weeks ago Bitcoin plummeted, dragging the entire market with it in a matter of hours.
The report revealed the topic of our article about how various traders have acted during these negative developments.
As expected, the report confirmed that small traders sold their bitcoins, while whales and institutions bought the decline.
The situation was repeated once the market started to recover.
The table below shows how the whales and the top traders reaped profits, excluding the majority of individual traders.
In the end, the report by OKEx and Kaiko highlighted the most important differences between these traders, saying that whales and institutions are buying low and selling high and that they are the biggest beneficiaries of the bitcoin volatility.
It may seem obvious to many traders, but commitment, emotion isolation and other methods enable the big traders to make more profits.
While retail traders (less than 2 Bitcoin) do not comply, as confirmed by the numbers shown in the report.
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