As Bitcoin approaches its previous all-time high, retail investors are returning to the market. Nonetheless, their transfer activity remained low, a sign of reserved interest among investors, particularly the small ones.
As CryptoQuant revealed, the number of addresses holding less than one Bitcoin has increased by 18,000 since Bitcoin's local bottom on July 3, 2023. This has put their total stake to 1.753 million Bitcoin.
However, the increase in retail holdings remains relatively slower than in the past, suggesting a cautious market sentiment.
As retail investors return, the accumulation acceleration has been less prominent than previous intervals. On the other hand, retail holdings rose by only 1,000 Bitcoin Over the past 30 days, showing slow growth. As stated by CryptoQuant, it is considerably lower than in previous months, for example, in May 2023, when the retail accumulation reached as high as 27,000 Bitcoin.
The slowing down in the rate at which investors acquire Bitcoin depicts smaller trader interest, likely due to uncertainty about Bitcoin's future price movement. While the market has overall bullish sentiment on its current price increases, retail investors appear hesitant to make substantial moves, opting for more conservative growth.
While retail investors have been relatively inactive in 2024, larger holders of Bitcoin, owning between 1 and 10,000 units, have been much more active. According to the data, larger investors have purchased 173,000 Bitcoins this year, exceeding the number of the same assets purchased by retail investors, which is 30,000. This difference frames emerging markets that, instead of individual retail investors, are dominated in the current period by institutional investors or high-net-worth individuals.
This has been particularly apparent when comparing the risk appetite of more prominent investors to that of retail investors, which has likely been beneficial in Bitcoin's market moving upwards. While retail has been cautious, big investors keep accumulating Bitcoin in large quantities, causing market pressure and further demand, which may push the price.
Despite the modest reentry of retail investors, their transfer activity remains low. As of September 21, 2024, the daily Bitcoin transfer volume by retail investors in USD terms dropped to $326 million—the lowest level since 2020. Historically, low transfer activity among retail investors often precedes major price rallies in Bitcoin, as seen in previous bull markets.