- Bitcoin’s price remained above $65,000 while retail investor activity fell.
- Current on-chain data indicated a lack of near-term holder activity, indicating potential for future market moves.
Bitcoin [BTC] currently trading at $65,524 and maintaining a position above $65,000. Despite this, the cryptocurrency has seen a consistent downward trend.
According to data from CoinMarketCap, Bitcoin has fallen 7.9% in the past two weeks and continues to decline, dropping another 0.1% in the past 24 hours. What other things are behind this price action?
Lack of usual retail boost
An insightful analysis from a CryptoQuant analyst marked a significant absence from the Bitcoin market: the retail investors.
Historically, the presence of new entrants and speculators, who typically held their coins for less than three months, has been a hallmark of Bitcoin’s cycle peaks.
The analyst noted:
“A central feature of the BTC cycle tops is the dominance of coins with a holding period of less than 3 months. Historically, this indicates that long-term holders (smart money) have already taken their profits, putting the market under the control of speculators and new entrants, resulting in a more volatile market structure.”
However, the current market cycle is different from the previous ones, mainly due to the low participation of these short-term holders.
Data indicated that only about 35% of Bitcoin’s realized cap was currently held by this group, significantly lower than the 70%-plus seen at peaks in previous cycles.
Source: CryptoQuant
Furthermore, the Spent Output Profit Ratio (SOPR) for these holders remained relatively subdued, further indicating that the market was not at a speculative high.
According to the analyst, this suggested we were still in the early stages of a bull market, and nowhere near the “peak euphoria” that typically precedes a major sell-off.
Source: CryptoQuant
The analyst added:
“The predominance of long-term holders in the market provides a more solid basis for price support. This robust structure and the relative scarcity of short-term bonds make an immediate move into a bear market less likely, indicating that there is still potential for a significant rally before the cycle top formation.”
Bitcoin: Technical Perspective
To validate the claim that the retail audience is conspicuously absent from the Bitcoin market, an examination of Bitcoin’s on-chain fundamentals was quite revealing.
from Glassnode facts showed a decrease in the number of active Bitcoin addresses; from a high of more than 1 million in March, the number has fallen below 800,000 and has remained at that level for the past month.
Source: Glassnode
Moreover, the number of new Bitcoin addresses has also decreased: from over 500,000 in January to less than 300,000 at the time of writing.
Source: Glassnode
This reduction in active and new addresses supported the idea that retail investors are less engaged, as increased activity in these metrics typically means greater retail participation.
Bitcoin shifted from fundamentals to technical analysis and showed signs of a downtrend as it failed to overcome major resistance levels on the daily chart.
The cryptocurrency was expected to continue this downward trajectory until it reached a key demand zone, potentially triggering a price rebound.
Source: TradingView
When applying a Fibonacci tool to Bitcoin’s 8-hour chart, this demand zone was found to be within the price range of $60,000 to $56,500.
Read Bitcoin’s [BTC] Price forecast 2024-2025
If the technical indicators hold true, Bitcoin could fall further into this discount zone, paving the way for a possible recovery as demand increases at these lower price levels.
This analysis coincides with AMBCrypto’s recent report Bitcoin price is expects to be punished by the miners until the hashrate improves.