BITCOIN’S SECRET AGENT: The Hidden Reason Behind Its New All-Time High

by

It’s a curious thing, folks, because, as we all know, when the price of Bitcoin hits a new all-time high, we’d expect the retail investors to be jumping for joy, their wallets overflowing with the promise of easy riches. But, alas, that’s not quite what’s happening.

Bitcoin Retail Demand 30-Day Change Is At Historically Red Levels

In a fascinating CryptoQuant Quicktake post, an analyst has blown the lid off the latest trend in the 30-day change of the Bitcoin Retail Investor Demand, an on-chain indicator that calculates the demand for the cryptocurrency among the retail investors. And, let me tell you, it’s a doozy.

So, what’s the deal with retail investors, you ask? Well, they’re the smallest of holders on the network, which means their transactions tend to be of a small size. Therefore, to track their activity, the metric uses the transaction volume of moves valued less than $10,000. Clever, eh?

Below is the chart for the indicator shared by the quant that shows the trend in the Bitcoin Retail Investor Demand 30-day change over the last few years. And, boy, is it a wild ride.

As you can see, the Bitcoin Retail Investor Demand noted a sharp positive monthly change during the price bull run beyond $100,000 that occurred last year. But, here’s the thing: this wasn’t anything unusual. Retail investors tend to get excited during price rallies, and their transfer activity generally rises during such times.

However, the scale of the spike was something extraordinary. It surpassed any other high in the indicator from the past few years, and, as the chart shows, it occurred near the price top. Hmm, sounds like a case of Fear Of Missing Out (FOMO) to me.

And, get this, all of the previous large spikes that the analyst has highlighted also took place around some sort of top in the cryptocurrency. So, it would appear that an excessive amount of FOMO from the retail investors is something that’s been bearish for price surges.

Since last year’s spike, the Bitcoin Retail Investor Demand has seen its 30-day change go through a sharp reversal. The metric has now not only dipped into the negative territory but has also actually fallen to a historical low of -22%. Oh dear, it looks like the retail investors are in a bit of a funk.

Interestingly, the indicator’s downtrend has maintained despite the price rally to the new all-time high (ATH) that Bitcoin has seen. As such, it would seem that the retail investors haven’t yet started flooding back into the cryptocurrency. And, given the historical pattern where FOMO proves to be fatal for rallies, this lack of optimism among the retail cohort may allow the current run to continue for a while longer.

BTC Price

At the time of writing, Bitcoin is trading around $106,400, up more than 15% over the last week. Not bad, eh?

Read More

2025-01-21 09:41