Bitcoin has seen turbulent price action over the last two weeks, with its price sliding over 9% between April 5 and April 8 alone. Although the cryptocurrency has recovered slightly, now trading at $84,412, it remains just 2.48% above its monthly opening. This correction has raised eyebrows across the market, but recent data reveals a clear divide in investor behavior—one that may shape Bitcoin’s next major move.

According to fresh on-chain analytics from CryptoQuant, the primary source of selling pressure isn’t the usual suspects. Instead, it’s short-term holders and smaller wallets that are rushing to the exits. These investors are showing signs of capitulation, offloading their Bitcoin in larger volumes compared to long-term holders, who are largely holding steady through the volatility.

CryptoQuant data shows short-term holders are currently sending around 930 BTC to exchanges each day, compared to just 529 BTC moved by long-term holders. This growing gap signals not only reduced confidence among newer investors but also resilience among seasoned market participants, who appear confident in the asset’s longer-term trajectory.

Further insights from wallet activity paint an even clearer picture of who’s selling. Crypto wallets are typically grouped by size—Shrimps (less than 1 BTC), Crabs (1–10 BTC), Fish (10–100 BTC), Sharks (100–1,000 BTC), and Whales (1,000+ BTC). Recent exchange inflow data suggests smaller holders are leading the sell-off, with Shrimps alone contributing roughly 480 BTC in daily inflows. Crabs followed with around 102 BTC, while Fish and Sharks contributed 341 BTC and 402 BTC, respectively. In stark contrast, Whales moved just 70 BTC per day to exchanges.

This divergence points to a familiar pattern in crypto markets: retail panic vs. institutional patience. Historically, when small wallet cohorts offload holdings in response to short-term fear while whales remain largely inactive, it has often marked the tail end of a market pullback.

In fact, many analysts argue that this wave of selling is less a sign of deeper problems and more likely a classic “shackout”—a period of short-term capitulation that typically precedes stronger recoveries. Whales and long-term holders aren't just sitting still; they appear to be deliberately avoiding panic-driven moves, likely viewing the current dip as a buying opportunity or simply part of the natural market cycle.

Despite the sell pressure from smaller wallets, Bitcoin’s performance over the past week has been relatively stable. It’s posted a 3.1% weekly gain and is up 0.7% over the last 24 hours. Since April 12, the asset has traded within a narrow range of $82,711 to $86,460, signaling market indecision but also resilience amid broader volatility.

What’s especially important in this environment is who’s not selling. Large holders—often dubbed “smart money”—tend to move strategically, not emotionally. Their continued confidence in Bitcoin, combined with a notable lack of large-scale sell-offs, hints that the underlying fundamentals of the market remain intact. That conviction may become the foundation for the next leg up, once short-term panic settles.

While retail traders continue reacting to headlines and price dips, whales and long-term investors are playing the long game. Their inactivity during this downturn suggests they see no fundamental threat to Bitcoin’s long-term value. This behavioral gap could serve as an early signal that a reversal is on the horizon.

In summary, the recent Bitcoin dip appears to be driven more by fear than fundamentals. Short-term holders and smaller wallets are showing classic signs of panic selling, while whales and long-term holders remain largely unfazed. This divide not only explains recent price movement but may also hint at what comes next. If history is any indication, a recovery may be closer than it seems—and those staying patient might reap the rewards.