Original title: who is buying Bitcoin?

Cryptocurrency returns over the past two weeks were the strongest this year, with the cryptocurrency index up about 25%. The rally began in the Asian session on Monday, July 26, when Bitcoin surged 15% in two hours.

At the time, zero hedging on the financial blog pointed out that Bitcoin's breakthrough of $35000 triggered stops in short positions.

Alexey Ostapchuk, a strategist at UBS, is also in his weekly cryptocurrency compass."the report says:

"from a technical point of view, the price momentum of Bitcoin has lost momentum on the 38.2% Fibonacci pullback, which is consistent with our view, continuing the obvious downward trend since May, and now the price of about $41000 has become a direct resistance. The resistance above this is $45000 near the 200-day moving average, followed by the Fibonacci pullback of 50.0% and 61.8%, close to $47000 and $51000, respectively. "

Other currencies in the cryptocurrency sector were caught on a buying spree, with BCH, ETH and XRP performing best.

Copper.co 's recent analysis of the data on the chain confirms UBS's observation.It also reflects that small and medium-sized investors have resumed their holdings since Bitcoin fell to the $35000 mark at the end of May.The fact is that, according to the indicators on the chain, the fact that the cryptocurrency has fallen further to $30,000 is seen as an average cost-effective buying opportunity.In short, retail investors buy more.

On a deeper level, Copper found that since the beginning of this year, data on the chain show that entities that hold less than one bitcoin have increased their holdings of bitcoin by $137000, equivalent to 72 per cent of the newly mined supply. At the same time, miners' balances have actually increased since the start of the year, meaning that not all unearthed bitcoins have entered the market.

Although we seem to be talking about a small amount of bitcoin, it is important in terms of the environment. The cumulative amount of these small bitcoins is more than three times the amount currently acquired by Tesla, Inc. and more than the $105000 acquired by Micro Strategies. There is a key point to consider further, and the demand of these investors has been very stable.

In 2021, entities holding 0.01 and 0.1 bitcoins increased their holdings by more than $40,000. Entities holding 0.1 to 1 bitcoin increased their holdings by $86000.

The holdings of these entities have not fallen for a month in a row since Bitcoin topped $1000 for the first time at the end of 2013. Since Bitcoin peaked in 2018, falling from nearly $20, 000 to $3000, physical holdings have increased by nearly $500000, growing every month.

This does not include institutional buyers. Although there are no actual figuresBut it is also important to consider that Bitcoin on the exchange also shows that retail investors are increasing their holdings.

Small investors can also have great influence. Do these investors want a piece of bitcoin? Or is it possible that traders convert earnings into bitcoin? Although this question can not be answered, so far, their actions are quite accurate.

It is also worth noting that as ethernet trading volume exceeds bitcoin, it may only be a matter of time before ethercoin becomes the largest cryptocurrency and its volatility is lower than bitcoin. UBS strategists also point out that most alternative coins are still much farther from the nearest all-time highs than Bitcoin and ethernet.

This raises a key question: who is buying bitcoin?

According to Ostapchuk, the main bitcoin buyers are still medium-sized "whale users" who hold 10 to 100000 bitcoins.

UBS's Ostapchuk summary:

"the retail trend is below normal, and the prices of most cryptocurrencies still have room for development."