Why do small scale Bitcoin holders panic sale?

[Accardo]

Whether it's small scale or large, people tend to panic during downswings, whether it's bitcoin or say something in the traditional stock market because of lack of education, plain and simple.  Anyone with the right amount of knowledge and know how will never panic in a down market because they are always invested in a manner where they are expecting a downfall, meaning they've either got the time to make it back up, or a downswing wont' hurt them too much because they don't have too much "in play".

The small holders tend to panic more because it could be all that they have and I don't see any problem on it nor belittle them with that because everyone was from there.

The most of it is the investor's previous intention on bitcoin, and the period they got hold of bitcoin. Arguably, not every small scale investor bought bitcoin for quick profits, the panic sellers were not just prepared to lose. Unfortunately, many amongst them purchased it at the wrong time; bull season. So, they'll have no more option than selling, due to the shock of losing their investment.

[fikrett]

Whether it's small scale or large, people tend to panic during downswings, whether it's bitcoin or say something in the traditional stock market because of lack of education, plain and simple.  Anyone with the right amount of knowledge and know how will never panic in a down market because they are always invested in a manner where they are expecting a downfall, meaning they've either got the time to make it back up, or a downswing wont' hurt them too much because they don't have too much "in play".

The small holders tend to panic more because it could be all that they have and I don't see any problem on it nor belittle them with that because everyone was from there.

The most of it is the investor's previous intention on bitcoin, and the period they got hold of bitcoin. Arguably, not every small scale investor bought bitcoin for quick profits, but those who panic sell during the bear market did so to earn additional money. Unfortunately, many amongst them purchased it at the wrong time; bull season. So, they'll have to panic sell, because of how shocked they're over the bear market.

That's why we should only use the funds we are okay to freeze/spend / turn into BTC.
It's not a one-way ticket that will get you in one day to the Heavens of sorts.
It's an idea and a long-term path to cross.

[Odohu]

The desire to sell is not only a thing with small scale investor but for people of different income levels. Few weeks ago, we saw how the German government dumped their Bitcoin in the market, amount running into millions which cannot be regarded as small scale investors. On the hand, there are still small investors that are holding and evening accumulating more. So selling and holding is an individual thing and depends on personal goals and targets.

[pawanjain]

This is wrong i believe small portfolio holders are the ones who need to hold onto their Bitcoin for a long so that it will have enough value and focus more on accumulating more Bitcoin. Selling it while the size is small would not yield any good profit at all because the higher the size of your Bitcoin the higher the profit that one should be expecting.

Small scale holder should prioritize how to get some good business or a better job so that they can invest more into their portfolio. 

Well it depends on what price the person is buying/selling bitcoin.
If in a falling market the person is selling at a higher price and buying at a lower price and then holding it then he would be gaining more profits.
But if the vice versa happnes then he would obviously losing more instead.
We get to learn these things only when we try it out but once we find out whether we are actually good in such trades or not only then we should follow this strategy.
I have failed in doing so and hence I prefer holding bitcoin instead. Holding has given me more profits than trading.

[mamesso]

Whales already understand the path they are taking compared to small investors who only target profits but are not ready to accept risks. The level of knowledge in investment will leave a different impression, whales will welcome a crash with enthusiasm because they can accumulate assets when the price drops, but small investors will panic when the crash and immediately sell assets because they are not ready to bear the risk.

Anyone can invest in Bitcoin, but not everyone has sufficient literacy in the investment field. Small investors need to understand more deeply the situation that is happening in the Bitcoin market, they also need to pay attention to Bitcoin's liquidity and fundamentals that are able to survive when shocks occur so that panic selling no longer occurs.

[BlackRexuz]

Whales have more experience in success stories so they know when to buy and when to sell, of course those who are called whales are usually used to playing risks so that is what small bitcoin holders do not learn and always panic because they get short-term profits, not long-term profits like whales.

[Hamza2424]

Your argument is valid and I am ready to do that with you all day. With what you have said so far you are typically saying that the investor should start trading because if he cant hod his Bitcoin for long then it is obvious that he would have to sell when it is high and buy back when the price is low. Such practices are considered trading as long as it is done in a short period even if it is not in real time. Have you ever considered the odds of the price not going down anymore after an investor sells his Bitcoin? Such events have happened so many times, and even if the price goes down later it might be after some months or weeks. Some investors will be tempted to withdraw their funds after waiting tirelessly for the price to go up, so may be pushed to quit and be satisfied with the profit they have. I still inside that small investors should never think of trading at all. My reason is that if they trade and lose it al they won't have anything in the portfolio but for a huge investor they can trade with a few coins and still have some left which they are willing to hold for a long.

Don't get me wrong I am not saying money is it all. I am saying accumulating is what is importance for those investors with small bugs instead of rushing after profits wth a short leg.

Hmm, So sorry that time I didn't have all day to this with you and I'm quite sure that same for you, even now I'll keep it simple and short as we don't have all day (Just kidding but really I don't have all the day). Anyway, firstly you've said what is trading and then moving to the main concern of odds where the price doesn't go down after a selling point, for the answer let me mention a significant portion of my previous post so you can read it.

If you are a small portfolio investor and have enough time, to learn about price action and different strategies focus on daily market news and updates, trade, and adjust your positions with a proper strategy you'll end up being a more return-making investor compared to one who just invested and held his funds. DYOR because if you trade there are some potential risks but on a large time frame and with Bitcoin with a strategy, it's super reliable to trade because it's not a meme coin shit.

Here is something I've mentioned called proper strategy implementation, which can save you from being trapped in such a situation you've mentioned, I'm not sure how experienced you are with crypto, but here no one knows the top and bottom everything is just a speculation based on mathematical calculations, so a smart investor never goes all in and all out on any point of the market cycle, this what goes under the risk management and strategic positioning. I hope this is enough for that question / concern whatever you call it.

Next moving to the point market went against his position for a long time and he made an exit after considering the profit is satisfying even they are pushed, I would comment on it how greedy that investor is even after a pushed satisfying profit he was waiting for an entry that good that he didn't got that entry otherwise he might have lost that amount too, as in the end motive was profit small or big moves along with the journey.

Next moving onto what should we advice to the newbies, my advice is mentioned above in the same quote, if you are passionate and have enough time go for long frame trading and even hold some potions, as its better to learn ans progress rather than wasting time and waiting for progress.

[serjent05]

I've come across several Bitcoin news channels and groups talking about whales accumulating more bitcoin and small holders panic selling, the recent one that got me curious is a news from (Crypto Insider) a Cryptocurrency news channels on telegram that's said, in August alone about 283 or more wallets surpassed the 100 $BTC mark.

 It further stated there that in total, over the past 30 days wallets with the balance 10 to 10,000 $BTC have accumulated over 100k $BTC worth about $7.6b and that has got me curious as to why the small scale holders do panic and sale instead of holding whereas those who got more than enough are seriously accumulating more.

 My thought is that, why can't they emulate those whales in holding or accumulating more , is it that they lack the funds to accumulate more, or they don't trust Bitcoin, or they went into the market without any idea of how Bitcoin operates, what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

It is simple, these small scale holders has not grasp the importance of waiting or having patience.  They are there probably because they wanted to get rich quick, and is hyped to buy BTC to gain profit in the short span of time.  They are also not well informed about the volatility of Bitcoin and worst, they spend the money that they can't afford to lose buying BTC thinking that their money will profit soon and recover their investment with profit.

So the first moment BTC crashes, they are the first one to sell their holding to not suffer losses.  These small scale holder probably don't have  enough trust to the Bitcoin market.

[Agbe]

Why do small scale Bitcoin holders panic sale?

Probably they are not for long term investment but for short term investment so when the market fluctuate to come down those small scale investors would be in fear and with the fear to lose all they would sell at that time to avoid further losing. Which is wrong and I see them not fully understand the cryptocurrency market. Whether small or big, your investment never lost and all what you have to do is to reschedule your investment plan to accumulate more if possible and wait patiently till when the price rise again then you can sell at the high price so you won't lose.

[Awaklara]

Whales already understand the path they are taking compared to small investors who only target profits but are not ready to accept risks. The level of knowledge in investment will leave a different impression, whales will welcome a crash with enthusiasm because they can accumulate assets when the price drops, but small investors will panic when the crash and immediately sell assets because they are not ready to bear the risk.

Anyone can invest in Bitcoin, but not everyone has sufficient literacy in the investment field. Small investors need to understand more deeply the situation that is happening in the Bitcoin market, they also need to pay attention to Bitcoin's liquidity and fundamentals that are able to survive when shocks occur so that panic selling no longer occurs.

as happened to Bitcoin recently, it might give a little blow to small investors and make them panic because of a rapid decline. the condition of the asset value which initially only experienced a small decline still makes small investors not disturbed psychologically. but when several declines occur again and it makes the investment value decrease quite quickly, panic will occur.
even big investors may feel the same situation, but maybe their way of dealing with this market decline is not bad by selling assets. there is an opportunity for profit in the future when continuing to hold assets. but it all depends on the experience and knowledge of the investor.

[Woodie]

Lets just say whales are in this for the long-term and will not be shaken by market dips that affect price..instead when price drops they simply buy more of the discounted coins unlike small scale hodlers who will panic if price goes against them especially if say they sold their car or house just to jump on the trending technological investment of the day...in short small scale hodlers want fast profits while protecting their capital and its really understandable if you know what's on the line!

[Richbased]

I've come across several Bitcoin news channels and groups talking about whales accumulating more bitcoin and small holders panic selling, the recent one that got me curious is a news from (Crypto Insider) a Cryptocurrency news channels on telegram that's said, in August alone about 283 or more wallets surpassed the 100 $BTC mark.

 It further stated there that in total, over the past 30 days wallets with the balance 10 to 10,000 $BTC have accumulated over 100k $BTC worth about $7.6b and that has got me curious as to why the small scale holders do panic and sale instead of holding whereas those who got more than enough are seriously accumulating more.

 My thought is that, why can't they emulate those whales in holding or accumulating more , is it that they lack the funds to accumulate more, or they don't trust Bitcoin, or they went into the market without any idea of how Bitcoin operates, what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

First of all is not every low bitcoin investors that does panic selling as majority of them even hold more than some whales reason being that this are people with low investments in Bitcoin and they are still in accumulations stages of their investment where they still need to acquire more Bitcoins instead of selling but for any low coiner who sells their Bitcoins, they are just mere traders that prefers little peanuts they get as profits. Whales are the bigger investors so they actually know the impact of their investments in the price of Bitcoin and these are literally people with huge investments outside Bitcoin so they are never afraid of what the future of Bitcoin may hold because they invest with the confidence of making it huge and they also have the beliefs that if their investments in Bitcoin doesn't work out they have where to fall back to which is the real life investments they own so as they are buying more Bitcoins that is how they are also funding other real life assets they own since they literally use proceeds from those investments to fund their Bitcoin investments, but the reason why some low coiners will panic sell is practically because they may be afraid of the market fluctuations or they are just practicing buying and selling (trading).

[Antotena]

My thought is that, why can't they emulate those whales in holding or accumulating more , is it that they lack the funds to accumulate more, or they don't trust Bitcoin, or they went into the market without any idea of how Bitcoin operates, what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

Whale means someone with money right and they have investment in other forms. You can't compare someone who is trading Bitcoin to make some profits so they can pay their bills and take of their needs with someone that can buy more Bitcoin when it dumps. Some people are investing in Bitcoin because of little profit they can get and take care of their needs, that's what they do to make a living and survive so there is no way they can emulate whales ways.

Another reason is whales can do anything at anytime and has liquid capital somewhere to enjoy their investments. A typical Bitcoin investor doesn't have that power, for instance a whale open a long position of Bitcoin with $1M with liquidation at $10k price of Bitcoin while someone with little amount will have liquidation at $50k, they will sell immediately the sense danger in the market so, don't compare weak hands and diamond hands.

[darkangel11]

Recently it's the whales that are dumping. When we were above $60k it was small investors, but below 58k it's mostly hedge funds who held money with ETFs.
The only one that isn't selling is yet is BlackRock. This is happening because since bitcoin was exposed to Wall Street the markets became connected and stocks were going down by a lot, especially Intel and Nvidia. Stocks are heavily manipulated so it's not a surprise that traders are sending shock waves into various other assets. A good example of such manipulation was the FUD that they spread to lower Nvidia stock, claiming that it has received a subpoena. Know the real value of the asset you hold and don't react to panic. If you have any money on the side, this is a great moment to buy bitcoin. You'll thank me later

[Finestream]

Whether it's small scale or large, people tend to panic during downswings, whether it's bitcoin or say something in the traditional stock market because of lack of education, plain and simple.  Anyone with the right amount of knowledge and know how will never panic in a down market because they are always invested in a manner where they are expecting a downfall, meaning they've either got the time to make it back up, or a downswing wont' hurt them too much because they don't have too much "in play".

The small holders tend to panic more because it could be all that they have and I don't see any problem on it nor belittle them with that because everyone was from there.

The most of it is the investor's previous intention on bitcoin, and the period they got hold of bitcoin. Arguably, not every small scale investor bought bitcoin for quick profits, the panic sellers were not just prepared to lose. Unfortunately, many amongst them purchased it at the wrong time; bull season. So, they'll have no more option than selling, due to the shock of losing their investment.

That's the consequence if they only invest for money, not because they have really known their investment well or they started with an extensive research prior to investing. Whether it's bullish or bearish, I guess there's no problem with that, as long as they can handle every risk that comes and still continue hodling despite of the current market condition.

[stadus]

I agree with @Die_empty's take in the second paragraph and if you carefully check why some people go into Bitcoin investment, you'd discover that many of them do this not because they want in their portfolio, but rather, a means to make quick money and if in a situation where it hits the target they set for it, they hurriedly sell off since they know it can quickly drop just as it rose so there you have it.
 You also called them small scale holders which means they do not have a mond to watch it mature unlike the long term holders.

Yes, I also agree with this. Some people just want to invest for quick returns and believe that with bitcoin, it's highly possible. Even with big time investors, still the motivation to get quick profits is there, but majority who do this are actually those small scale investors. Probably because they want to grow quickly their small, budgeted funds, to the extent that they end up selling at a wrong timing, thus losing their investment and their future profits in the end.

[PX-Z]

Some hodlers don't have emergency funds, so they panic sell to cover expenses even when they are not in profit. While big investors have the financial strength to accumulate as much as possible without problems.

This is true, but with this kind i don't think i can call them bitcoin holders. Those who hodl were always in the long run, at least several months to years plan of holding. What OP is talking is more like traders, small scale traders who usually panic when bitcoin is going on red side of chart.

[SamReomo]

what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

The small investors or traders don't know in depth about Bitcoin and its future and that's the reason they sell in panic when they see Bitcoin price dropping too hard in short duration. I've seen investors who sold most of their Bitcoin because they didn't knew much about Bitcoin and were only curious to earn profit by investing in it.

It also depends on a investor mind, those who invested in Bitcoin when it's price was over $70k might have lost faith in it because their investment in down in value but those who understand the nature of Bitcoin may average their positions overtime and sell with profit in end.

[bhadz]

The small holders tend to panic more because it could be all that they have and I don't see any problem on it nor belittle them with that because everyone was from there.

The most of it is the investor's previous intention on bitcoin, and the period they got hold of bitcoin. Arguably, not every small scale investor bought bitcoin for quick profits, the panic sellers were not just prepared to lose.

Yes, that's making more sense. Those that are panicking aren't prepared for the losses that they are about to get. But they will only be at loss if they sell at loss. And if they are seeing the projection of their portfolio at loss, they can still recover somehow if they become patient and at the same time use that moment to keep on buying while the market or Bitcoin is at the dip.

Unfortunately, many amongst them purchased it at the wrong time; bull season. So, they'll have no more option than selling, due to the shock of losing their investment.

IMHO, they can look at it as a blessing in disguise. And that is because they are seeing how this market works.

[doomloop]

i dont think weak hands are selling at a loss, they are just the weak hands making minimum profit, but end up aiding the majority to have a raised bottom

Well, most of them do sell at a loss, especially if they have bought just recently and the market starts going down. Most of such investors are the ones who have heard very much of Bitcoin and cryptocurrencies and they have the image in their mind that Bitcoin and cryptocurrencies are all about profit and nothing else, so as soon as they see their investments losing value, they lose their mind, and out of those emotions, they panic sell their assets at a loss.

In some cases though, weak hands might not sell at a loss, just like how you described it, if they have bought their assets at an earlier price, but then panic when the market starts dropping at a later time, they might only sell at a price that could be better if they had held longer, but it's a rarity, most weak hands would sell at a loss and without listening to any advise or anything.