BTC - Volume Volume - Why Did The 2020 Bull Run End Strangely?
Volume is usually defined by the number of coins traded. I like to see volume in terms of the dollar value traded. What I'd really like to know, however, is who is trading the volume. I'd like to see what "smart money" is doing. BTC blockchain data contains available information on the ledger that helps level the playing field for retail traders like me. Glassnode farms that data and makes it available.
I'm not allowed to share Glassnode images, but I tried to graphically describe them in an understandable way. I'm searching for the answer to why the 2020 bull run came to an abrupt end (or at least why it didnt end with a blow off top). I got out in time, but not without unexpectedly giving some profits back. I want to be able to see it coming more clearly in the future. Glassnode allows me to see the # of BTC wallets with >1000 BTC in them. That's as close to "smart money" as I can find. I've studied the history of those wallets for the entire BTC history.
For the entire BTC history (except the 2020 bull run), I found these large BTC wallet holders to be smart. They jump into the market before the big runs and jump out before the tops. They arent typically phased by the rises and dips in between, and they are patient. The accumulation and distribution of 2020 smart money wallets (>1000 BTC) , however, is completely different than all other cases . Smart money started out predictable and controlled by increasing new the # of large wallets at the end of the 2017 market crash and consolidation. Whale wallets steadily increased as time progressed. Things fell apart, however, after the V bottom following the pandemic crash. "Smart money" sat on their hands until the last moment when price was in its parabolic rise. Their role in the 2020 market rise was more like a retail trader buying BTC at the top after a whisper from their neighbor. I theorize that a lack of organization by these last minute, large investors actually created market instability which put a damper on the craziness required for a blow off top. Those large wallets (>1000 BTC @~$40,000/BTC), which were created in 1 month from 1 Jan to 5 Feb, were worth at least 11 billion dollars. They promptly started dumping them back on the market on 9 Feb. That's not the way to win retail FOMO buyers trying to make new ATH's.
Summary:
Smart money appears to very late to the game following the pandemic disruption, and acted more like "big, dumb money" retail investors than "smart money". They FOMO'd in, got spooked, and exited just as quickly leaving the market to absorb their sales while trying to make new highs. Normally smart money provides price stabilizing control to facilitate an orderly market that they are quietly selling into. Looking at the 2017 bull run, smart money was in control - almost as if they choreographed the run. Its textbook compared to the 2020 bull run BTC grab-and-run.
I'm not allowed to share Glassnode images, but I tried to graphically describe them in an understandable way. I'm searching for the answer to why the 2020 bull run came to an abrupt end (or at least why it didnt end with a blow off top). I got out in time, but not without unexpectedly giving some profits back. I want to be able to see it coming more clearly in the future. Glassnode allows me to see the # of BTC wallets with >1000 BTC in them. That's as close to "smart money" as I can find. I've studied the history of those wallets for the entire BTC history.
For the entire BTC history (except the 2020 bull run), I found these large BTC wallet holders to be smart. They jump into the market before the big runs and jump out before the tops. They arent typically phased by the rises and dips in between, and they are patient. The accumulation and distribution of 2020 smart money wallets (>1000 BTC) , however, is completely different than all other cases . Smart money started out predictable and controlled by increasing new the # of large wallets at the end of the 2017 market crash and consolidation. Whale wallets steadily increased as time progressed. Things fell apart, however, after the V bottom following the pandemic crash. "Smart money" sat on their hands until the last moment when price was in its parabolic rise. Their role in the 2020 market rise was more like a retail trader buying BTC at the top after a whisper from their neighbor. I theorize that a lack of organization by these last minute, large investors actually created market instability which put a damper on the craziness required for a blow off top. Those large wallets (>1000 BTC @~$40,000/BTC), which were created in 1 month from 1 Jan to 5 Feb, were worth at least 11 billion dollars. They promptly started dumping them back on the market on 9 Feb. That's not the way to win retail FOMO buyers trying to make new ATH's.
Summary:
Smart money appears to very late to the game following the pandemic disruption, and acted more like "big, dumb money" retail investors than "smart money". They FOMO'd in, got spooked, and exited just as quickly leaving the market to absorb their sales while trying to make new highs. Normally smart money provides price stabilizing control to facilitate an orderly market that they are quietly selling into. Looking at the 2017 bull run, smart money was in control - almost as if they choreographed the run. Its textbook compared to the 2020 bull run BTC grab-and-run.
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