Cryptocurrency Market Crash Diverges! Retail Investors Suffer Heavy Losses and Flee, 1,303 Whales Buy Back Against the Trend

The cryptocurrency market experienced over $5 billion in liquidations over four days. Glassnode indicates that the super whales are “lightly accumulating,” while retail investors have been selling for more than a month. The number of entities holding 1,000+ BTC has increased to 1,303, adding 96 giant whales. Ethereum’s daily new addresses hit a record high of 427,000, Solana’s active addresses grew by 24.3%, and on-chain activity is diverging from the price trend.

Glassnode Data Reveals a Stark Contrast Between Whales and Retail Investors

(Source: Glassnode)

Who is buying and who is selling during the market crash? According to on-chain data, currently only super whales holding 10,000 or more Bitcoin are purchasing this largest cryptocurrency during the sharp decline. All other holder groups are pressing the sell button. Glassnode’s wallet accumulation trend score (by wallet type) highlights this disparity. The score measures the relative behavior of wallets of different sizes based on wallet balances and the amount of Bitcoin gained over the past 15 days. A score close to 1 indicates buying activity, while a score near 0 indicates selling.

Based on Glassnode’s data, the largest super whales are currently in a “light accumulation” phase. Since Bitcoin fell to $80,000 at the end of November last year, they have maintained a neutral to slightly positive balance trend. During this period, Bitcoin’s price was mostly range-bound between $80,000 and $97,000 until the market crash accelerated at the end of January. When the price dropped to a nine-month low of $74,532, the buying behavior of super whales became even more pronounced.

In contrast, all smaller groups have been net sellers, especially retail holders with less than 10 Bitcoin. This segment has been selling continuously for over a month, reflecting persistent bearish sentiment and risk aversion among small investors. This behavior aligns with classic market psychology: retail investors tend to sell in panic, while smart money buys during panic.

(Source: Glassnode)

Meanwhile, the number of independent entities holding at least 1,000 Bitcoin increased from 1,207 in October to 1,303. Since Bitcoin hit its all-time high in October, this growth indicates that larger holders have been buying the dip. The number of whales holding 1,000+ BTC has returned to the high levels seen in December 2024, further confirming that big players are absorbing supply while smaller holders continue to exit.

Comparison of Super Whales vs Retail Behavior (Past 15 Days)

• Super Whales (10,000+ BTC): Accumulation trend score near 1, consistently “lightly accumulating”
• Large Holders (1,000-10,000 BTC): Neutral leaning towards buying, entity count increased by 96
• Mid-sized Holders (10-1,000 BTC): Mild selling, risk management dominates
• Retail (<10 BTC): Accumulation trend score near 0, selling continues for over a month

This trend of wealth concentration has accelerated during the market crash. As retail investors panic and sell assets at low prices, super whales buy up the dips, further widening the wealth gap. This is why Bitcoin’s ownership structure tends to become more concentrated after each major correction.

Ethereum On-Chain Activity Hits Record High Diverging from Price

(Source: ZeroHedge)

Goldman Sachs points out that, contrary to declining price performance, on-chain activity shows a different picture, especially on the Ethereum and Solana networks. Bitcoin’s on-chain activity has decreased over the past month, as evidenced by a 14.9% MoM decline in average daily transaction count, a 3.6% MoM decrease in average daily new addresses, and a 2.7% MoM reduction in average active addresses. This contraction in on-chain activity aligns with falling prices, indicating genuine demand fatigue for Bitcoin.

In contrast, Ethereum’s average daily active addresses, new addresses, and transaction counts have increased by 27.5%, 26.8%, and 36.0% respectively. This explosive growth is rare and suggests the Ethereum ecosystem is experiencing a surge in usage. Specifically, Ethereum’s average new addresses in January reached 427,000—compared to 162,000 during the DeFi summer of 2020. The current new address count is 2.6 times higher than during DeFi summer, setting a new record.

In terms of activity, daily active Ethereum addresses have reached 1.2 million—another record high based on a 7-day moving average. This divergence between on-chain activity and price is extremely rare. Usually, increased on-chain activity drives prices higher, as more usage indicates higher demand. However, Ethereum’s market cap is currently below its realized cap (the value based on the last transaction price of each token), meaning most ETH holders are currently at a loss.

This divergence can be explained in several ways. First, the surge in on-chain activity may be driven by bots, airdrop hunters, or spam transactions rather than genuine economic activity. Second, new users are entering while old users are exiting at a loss, creating net selling pressure. Third, increased DeFi and NFT activity is not translating into demand for ETH, as usage rises but value capture remains weak. Regardless of the cause, this divergence indicates a shift in Ethereum’s valuation logic.

Solana’s Growth Against the Market and Technical Resonance

For Solana, average daily active addresses and transaction counts grew 24.3% and 8.2% quarter-over-quarter. While not as explosive as Ethereum, this growth is impressive amid the market downturn. Solana’s on-chain activity is mainly driven by meme coin trading, NFT minting, and DeFi applications, demonstrating that its high-performance, low-cost technology continues to attract real usage.

Joel Kruger, market strategist at LMAX Group, said: “From a technical perspective, recent declines have brought prices closer to attractive levels.” He suggests that if Bitcoin drops to around $70,000, it could find “strong support.” This view provides professional backing for buy-the-dip strategies during the market crash.

Timothy Misir, research director at digital asset firm BRN, said: “In the crypto space, stable ETF capital flows are a key indicator to watch. Without them, the rally could fade.” This warning highlights the fragility of the current rebound. While super whales are buying, if ETF outflows persist, institutional buying may be insufficient to sustain the rally.

The divergence between surging on-chain activity and falling prices during the market crash creates a rare investment window. When fundamentals (on-chain usage) improve while prices decline, it often signals excessive market pessimism and undervaluation. Super whales are capitalizing on this opportunity by accumulating heavily. However, retail investors, limited by capital and risk tolerance, are forced to cut losses and exit.

This divergence may evolve into two scenarios in the coming months. In the optimistic case, super whales’ judgment proves correct, the market bottoms out, and their low-cost acquisitions lead to substantial gains. In the pessimistic case, the market continues downward, and despite their large capital, super whales may face paper losses, while retail investors, though forced to cut losses, avoid larger damage. Historical experience suggests the former is more likely, as super whales tend to have deeper market insights and more professional analysis capabilities.