Recently, retail investors have shown a rather cautious attitude towards the cryptocurrency market. This behavior contrasts sharply with previous cycles, when their involvement had a significant impact on the industry’s dynamics.
Experts believe that the current reluctance of retail investors to engage with the crypto market may influence its trajectory. Gustavo Faria, co-founder of Nosy, pointed out several key indicators that confirm the idea that retail investor participation is still weak:
A defining characteristic of cycle peaks in Bitcoin is the dominance of coins held for less than three months. Currently, short-term holders make up about 35% of the realized cap HODL waves, compared to over 70% during previous market peaks. This indicates that long-term Bitcoin holders, often referred to as “smart money,” are holding their positions, contributing to a more stable market foundation.
From a historical perspective, the spent output profit ratio (SOPR) of short-term holders has exceeded 1.10 points during market peaks. In this cycle, the highest recorded SOPR value is 1.05, indicating a more neutral market position.
Furthermore, Faria believes that the current market remains stable, reducing the likelihood of an immediate transition to a bear market and showing potential for further growth.
Anthony Sassano, an independent Ethereum educator, also emphasized the lack of broad market growth, usually attributed to retail investor participation:
“Retail trading and new money was and is still not here – [all the movements come] only from old crypto users…”
In support of this opinion, crypto analyst Cyclop confirmed the lack of enthusiasm in the retail trading sector. He pointed out that trading volumes are significantly lower than in 2021, despite the higher price of Bitcoin. The analyst suggests that this lack of participation by small investors indicates that the market has not yet reached the speculative mania observed in previous cycles.