Retail demand for Bitcoin rises to four-month high ⋆ ZyCrypto

The rise in Bitcoin adoption has spurred retail investment in the space. While traditional and institutional investors are taking the lion’s share of the recent surge, retail traders are also accelerating the pace. Traditionally, smaller investors have followed crypto whales, picking up early wins and taking hits in bear markets.

Small investors increase their assets

A new report from analytics company CryptoQuant shows the growth of retail transactions in the cryptocurrency market over four months. Retail investors increased their holdings by 13% last month following the market rally. As digital asset prices rise, small buyers will be eager to participate in the ecosystem in hopes of making a profit.

This scenario was observed only in March, and since then the industry has faced a correction as retail investors restructured their holdings. The highs in the first quarter of 2024, which were joined by participants at all levels, were driven by the approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC). The new inflows brought the market leader’s share to more than $73,000 along with retail holdings.

“On-chain transaction volume up to $10,000 is one way to track small investor activity, reflecting market sentiment among non-institutional participants. This pattern of activity is much more sensitive to market sentiment and news than to fundamentals, but it can be a source of information about the flow of capital on the network.”

Retail investment has fallen over the past four months due to asset prices and slight outflows from institutional funds. During market corrections, whales typically buy the assets of smaller investors as they hope to recoup their profits faster. Whales hold these tokens while expanding and restructuring their portfolios for the next bull cycle.

What’s next for the BTC price?

Renewed interest from institutional and retail traders will boost Bitcoin’s price. At the time of publication, the largest cryptocurrency by market capitalization is trading at $67,817, having shown growth over the past week. When the asset breaks through resistance levels, bulls target $72,000 as they forecast a move above the asset’s high.

While institutional clients dominate the scene, as seen with the approval of ETFs and the creation of miner reserves, retail traders have increased exposure to new markets and increased confidence among DeFi users. Altcoins have also risen in price over the past seven days, with Ethereum trading at $2,678, up 2% from Solana (SOL) and Dogecoin (DOGE).