Data from the chain shows that Bitcoin transfer volume from retail investors has fallen sharply recently, a sign that this group may be losing interest.
Bitcoin volume for retail-sized transactions has recently fallen
As explained by CrypoQuant author Axel Adler Jr. in a new one after on
The ‘transfer volume’ here refers to the total amount of Bitcoin (in USD) that addresses on the network have in circulation on a daily basis. This metric is not confused with ‘trading volume’, which typically only tracks the volume involved in trades on spot exchanges.
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When the value of the transfer volume is high, it means that the users are currently moving large amounts of money on the blockchain. Such a trend implies that investors are actively interested in trading the asset.
On the other hand, the low benchmark suggests that holders may not be paying attention to the cryptocurrency as they are not participating in much activity on the network.
Here is a chart showing the trend in the 30-day moving average (MA) Bitcoin transfer volume, specifically for the transactions involving coins worth a minimum of $1,000 and a maximum of $10,000:
As shown in the chart above, Bitcoin transfer volume for transactions of this size spiked to relatively high levels during the rally earlier this year.
The transfers worth $1,000 to $10,000 are considered relatively small, so their volume would reflect the activity level of the smallest investor in the market: retail.
The rise in this measure earlier this year could indicate that the price increase has fueled interest in the asset among these investors. The chart shows that a similar trend was also observed during the previous bull run.
Sharp price action is generally exciting for retail investors, so it is not surprising that they become more active during rallies. This increased interest makes each wave sustainable for longer periods of time. As such, only rallies that can attract retail interest can last.
As the chart shows, Bitcoin transfer volume for retail transactions peaked in May and has seen a sharp decline of 30% since then. This would mean that the bearish price action has made these investors disappear.
Interestingly, the downtrend in the indicator continued even as Bitcoin staged a recovery above $70,000 a few weeks ago, which could have potentially foreshadowed that this rally would never last.
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With 30-day retail transfer volume hovering at the same lows as during the bearish period in July 2021, any new recovery runs could also end in failure unless the indicator shows an upswing.
BTC price
At the time of writing, Bitcoin is trading around $62,200, down more than 4% in the past week.
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
