Small investors bounce back after a 4-month hiatus

After an unsuccessful attempt to break above $70,000 this week, bitcoin briefly dipped below $67,000 before staging a modest recovery.

Despite the brief pullback, the data indicated renewed interest from retail investors, which is typically seen as a strong indicator of broader market sentiment.

Bitcoin Retail Activity Returns

CryptoQuant’s latest analysis reveals a resurgence of retail activity at the chain after a four-month lull. A key indicator is the volume of on-chain transactions below $10,000, which reflects the participation of smaller, non-institutional investors. These transactions are highly sensitive to market sentiment and often react more to news than to underlying fundamentals, helping to measure the flow of capital among retail participants.

Over the past 30 days, retail demand has grown by 13%. This is a significant change compared to the previous months of decline in activity. CryptoQuant’s analysis noted that this level of participation was last seen in March, when bitcoin was nearing its most recent all-time high.

During this quiet period, whale investors continued to maintain high transaction volume, soaking up BTC while retail activity slowed. The recent rise in bitcoin prices has piqued the interest of retail investors, suggesting lower risk aversion and the potential for more retail-driven momentum.

So far this year, bitcoin is up 60%, from $42,280 at the start of the year to $67,000 at press time. In October alone, the asset appreciated by 8%.

Several factors have supported this upward trend. In addition to increased whale activity, investors are increasingly pricing in a potential Federal Reserve rate cut in November.

Optimism is further bolstered by the growing chances of Donald Trump in favor of crypto in the 2024 presidential race. Additionally, the fear and greed index continues to reflect traders’ strong confidence in Bitcoin.

Parabolic phase

Ted Pillows recent tweet also offered an optimistic view of the trajectory of the bitcoin market. He said the downtrend is officially over, signaling the start of a new phase for BTC holders.

According to the market analyst, the asset has now passed its period of consolidation and accumulation, suggesting that it could be preparing for a parabolic phase.

Another market analyst, Doctor Magic, highlighted a steady decline in the dominance of stablecoins since mid-2024. This trend generally precedes significant price increases in major cryptocurrencies, including bitcoin. The decline in stablecoin dominance suggests that investors believe that BTC will gain value against the USD, indicating increased investor confidence and growing risk appetite as the market prepares for the next stage

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