Bitcoin (BTC) continues to creep closer to its all-time high, suggesting a nascent bull run may finally arrive. However, transfer activity is still low, with retail investors slowly returning, according to CryptoQuant data.
Since that bottom on July 3, 2023, small-scale investors have been adding 18,000 Bitcoin to their portfolios, pushing their total to 1,753 million Bitcoin. Retail investor activity could be more active when measured against historical standards.
Retail growth over the past 30 days increased by just 1,000 Bitcoin. The slower pace of accumulation suggests smaller investors are waiting to see how high the cion’s price may go.
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Retail Transfers Reach New Lows in 2024
This uptick in retail investor interest in Bitcoin looks to be a positive indicator that the market is optimistic about potentially running bullish. But they aren’t as aggressive as larger investors who are amassing on their watch.
Looking at the big, picture since May this year, retail accumulation has fallen a lot, and holdings have grown by just 30,000 Bitcoins this year. Meanwhile, investors owning 1 to 10,000 Bitcoins have added 173,000 to their portfolios.
However, this disparity between the retail investor and the larger investor points to a shift in market dynamics. Much of the demand for the leading crypto is being driven by institutional and high-net-worth individuals, compared to the slower pace of retail investors.
Transfer activity by retail investors remains near its lowest point this year, which adds an additional layer of caution. By USD terms, daily Bitcoin transfers by retail investors fell to $326 million on September 21, 2024. Low transfer activity has historically preceded big price rallies from a previous bull market.
Larger Investors Propel Bitcoin’s Upward Momentum
Retail investors are cautious, but more prominent players are driving Bitcoin’s newfound upward trend. Their aggressive accumulation reflects their strong confidence in their future performance.
This group’s demand shows the cryptocurrency market’s bullish outlook, although smaller investors are proceeding more cautiously. If Donald Trump wins the 2024 US presidential election, Bitcoin could reach $92,000, predicts the head of alpha strategies at Bitwise.
Such speculation drives the market’s bullish sentiment, which is attracting retail and institutional investors. Although it is upbeat, retail participation has yet to catch up in earlier Bitcoin growth phases.
While retail investors have been chipping into their holdings, their contribution to the market is relatively small. The near-term tone of the market should also highlight the role that more prominent investors will play as drivers of increased demand.
Even if retail investors cannot keep up the same pace at which they’ve poured into Bitcoin over the past few months, they could play a pivotal role if they join the fun as it prepares to surpass previous highs.
Retail Participation Crucial for Bitcoin’s Bullish Run
Retail investors have been returning to the market in size at a pace somewhat behind their historical level, but their participation will be important in the months ahead. This was the cautious behavior we expected, and following historical trends should result in a price rally.
Without a doubt, retail investors can jump in and help push the price of Bitcoin higher. It also suggests possible market changes, such as reduced transfer activity among retail participants.
In anticipation of the height levels approached by Bitcoin, retail investors may have more confidence, which can then lead to their higher accumulation and sending volume. Also, the low activity of retail players during previous bull runs was a precursor to fast price increases.
