On-chain data shows that demand for bitcoin from retail investors has fallen to three-year lows, a signal that could be bearish for btc.
bitcoin retail investor transfer volume has plummeted recently
As CryptoQuant founder and CEO Ki Young Ju explained in a new… x.com/ki_young_ju/status/1813986352662282751″ target=”_blank” rel=”noopener nofollow”>mail On x, retail investor demand has seen a marked decline recently. “Retail investors” here refers to smaller investors in the bitcoin market.
The transfer volume that corresponds to them is generally used to track the demand for cryptocurrency use that exists among any group. In the case of retail investors, their transactions are usually worth less than $10,000 due to their small size.
As such, Young Ju has cited the 30-day change in total transfer volume for transactions of this size to show what demand among retail investors currently looks like.
Below is the chart shared by the founder of CryptoQuant showing the trend in this metric over the past few years.
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/07/Retail-demand-for-Bitcoin-has-fallen-to-a-three-year-low.jpeg" alt="Retail demand for bitcoin” width=”4000″ height=”2250″/>
The value of the metric seems to have observed a sharp decline in recent days | Source: x.com/ki_young_ju/status/1813986352662282751/photo/1" target="_blank" rel="noopener nofollow">@ki_young_ju on x
As can be seen in the chart above, the 30-day change in retail investor transfer volume has recently dipped deep into negative territory for bitcoin, implying that the transfer volume associated with these holders has been shrinking.
The rate of decline is quite remarkable, as the value of the metric is currently at the lowest level in roughly three years. This drop would suggest that the recent bearish action in the market has caused retail investors to lose interest in the cryptocurrency.
The btc price has been recovering over the past week, but it’s clear that it hasn’t been enough to reignite demand among this group yet. It remains to be seen whether the transfer volume for these investors experiences a change in the coming days if the price continues on this trajectory.
While demand for blockchain usage has been low among retail investors recently, they have been buying, as analyst James Van Straten explained in an x article. x.com/jvs_btc/status/1814207053751091599″ target=”_blank” rel=”noopener nofollow”>mail.
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/07/1721480841_136_Retail-demand-for-Bitcoin-has-fallen-to-a-three-year-low.jpeg" alt="Retail demand for bitcoin” width=”828″ height=”468″/>
The trend in the retail investor demand for buying or selling the asset | Source: x.com/jvs_btc/status/1814207053751091599/photo/1" target="_blank" rel="noopener nofollow">@jvs_btc on x
The analyst also pointed out how these investors have started behaving like smart money. The chart shows that they have been buying net amounts during bitcoin price dips, while they have been selling near the highs.
The most prominent example of this pattern is the buying spree this group undertook during the bear market lows following the crash due to the collapse of the FTX cryptocurrency exchange.
btc Price
At the time of writing, bitcoin is trading around $64,100, up more than 11% in the past seven days.
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Looks like the price of the asset has been moving sideways over the past few days | Source: BTCUSD on TradingView
Featured image by Dall-E, Glassnode.com, CryptoQuant.com, chart by TradingView.com