On-chain data shows that retail investor demand for Bitcoin has fallen to a 3-year low. This could be a negative sign for BTC.
Bitcoin Retail Investor Transfer Volume Has Dropped Sharply Recently
As explained by CryptoQuant founder and CEO Ki Young Ju in a new after on X, demand from private investors has fallen sharply recently. The “private investors“This refers to the smallest investors in the Bitcoin market.
The transfer volume associated with them is generally used to track the demand for the use of the cryptocurrency present among a cohort. In the case of retail investors, their transactions are typically valued at less than $10,000 due to their small size.
Young Ju cites the change in total transfer volume over the past 30 days for transactions of this size to show what demand among retail investors looks like at the moment.
Below is the chart shared by CryptoQuant’s founder that shows the trend in this metric over the past few years.
The value of the metric seems to have observed a sharp decline in recent days | Source: @ki_young_ju on X
As you can see in the chart above, the 30-day change in retail investor transfer volume has recently dipped deep into negative territory for Bitcoin. This means that the transfer volume associated with these holders has declined.
The drop is quite notable, considering the metric’s value is currently at its lowest level in about three years. This pullback could indicate 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 is clear that it has not been enough to rekindle demand among this group. It remains to be seen whether the transfer volume for these investors will see a turnaround in the coming days if the price continues this trajectory.
While demand for blockchain adoption among retail investors has been low lately, they are still buying, as analyst James Van Straten explained in an X after.
The trend in the retail investor demand for buying or selling the asset | Source: @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 dips in the Bitcoin price and selling around peaks.
The most striking example of this pattern is the buying spree this group sustained during the lows of the bear market following the crash resulting from the collapse of the cryptocurrency exchange FTX.
BTC price
At the time of writing, Bitcoin is trading at around $64,100, up over 11% in the past seven days.
Looks like the price of the asset has been moving sideways over the past few days | Source: BTCUSD on TradingView
Main image from Dall-E, Glassnode.com, CryptoQuant.com, chart from TradingView.com