Recently, retail investors have shown a cautious attitude towards the cryptocurrency market. This behavior is in sharp contrast to previous cycles, when their participation had a significant impact on the industry’s dynamics.
Experts suggest that the current reluctance of retail investors to participate in the cryptocurrency market may affect its development trajectory. Nosy co-founder Gustavo Faria pointed out several key indicators that reinforce the view that retail investor participation remains weak:
Decisive features of cycle peaks
Bitcoin’s popularity among coins held for less than three months.
Currently, short-term holders account for about 35% of the realized cap, compared to over 70% during the previous market peak. This demonstrates that “smart money,” which refers to long-term holders of Bitcoin, is maintaining its position and helping to build a more stable market foundation.
Bitcoin Realized Cap Chart
Historically, the SOPR (Spent Output Profit Ratio) of short-term holders has exceeded 1.10 during market peaks. In this cycle, the highest SOPR recorded is 1.05, indicating a more neutral market stance.
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Faria also believes that the current market stability reduces the possibility of an immediate transition to a bear market and shows potential for further growth.
SOPR of short-term Bitcoin holders
Anthony Sassano, an independent thematic educator, also emphasized the lack of broad market growth typically driven by the participation of retail investors:
“Retail” and new funds from the past and present are still not here—[all the moves are coming] just the old crypto users…
2.5 months later, the total market value of all assets outside the top 10 has dropped by 40% (all assets outside of BTC and ETH have dropped by 26%)
“Retail” and new funds from the past and present are still not here—this is just the local crypto people engaging in the biggest PvP
https://t.co/Hs4d4yakvX
— sassal.eth/acc (@sassal0x)
June 18, 2024
Cryptocurrency analyst Cyclop supports this view, reinforcing the lack of enthusiasm from the retail sector. He points out that despite the higher Bitcoin prices, trading volume remains significantly lower than in 2021. The analyst believes that the lack of participation from small investors indicates that the market has not yet reached the speculative frenzy of the previous cycle.
Cyclops Statement:
The general public has not yet entered the cryptocurrency space. My friends are not messaging me on WhatsApp. My mom doesn’t know that Bitcoin is at an all-time high.
Bitcoin trading volume
