Following its bearish start to October, Bitcoin has since shifted momentum, rising as high as $69,000 in the last two weeks. Despite this significant price rally, Bitcoin retail investors remain hesitant to engage the market. In its weekly crypto report on Friday, blockchain analytics firm CryptoQuant shared an interesting insight into this low retail activity in the Bitcoin market.
According to CryptoQuant, retail investors’ holdings have grown by 18,000 BTC valued at $1.2 billion over the last four months reaching a total new value of 1.753 million BTC worth $112.7 billion.
While this development demonstrates a rising market interest by these small investors, the analytic firm notes the pace of accumulation is significantly slow compared to historical data as retail investors only acquired a net 1,000 BTC valued at $66.31 million, in the last 30 days. Notably, the retail investor accumulation rate has been on a consistent decline since May 2023, when their holdings rose by 27,000 BTC worth $1.79 billion
Therefore, CryptoQuant reports that these Bitcoin individual investors have only increased their investments by 30,000 BTC valued at $1.99 billion in 2024, which pales in comparison to the whale investors whose holdings have grown by 173,000 BTC worth $11.50 billion in the same period.
During periods of price gain, low retail investor activity as discussed above can be concerning as it represents decreased market liquidity or even a lack of market confidence in the asset’s ability to sustain its current bullish trajectory.
Alternatively, this lack of interest from small-scale investors also presents positive indications. For example, CryptoQuant reports that low retail activity includes these small investors holding onto their Bitcoin rather than selling. The analytics firm notes that Bitcoin transfer to exchange in January 2023 has decreased from a daily average of 2,700 BTC to 1,400 BTC in 2024, thus there is reduced selling pressure on the token.
In addition, transfer activity among retail investors remains low, with transaction volume dropping to $326 million on September 21, the lowest level recorded since 2020. While reduced transfer activity may indicate limited market volatility, CryptoQuant states that low retail activity has historically preceded significant price gains for Bitcoin.
At the time of writing, Bitcoin trades at 66,896 following a 1.11% decline in the last day due to reports of an alleged investigation into Tether, the issuer of stablecoin USDT, and conflict in the Middle East. However, Bitcoin’s daily trading volume is up by 34.29% and is valued at $42.10 billion.
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