Bitcoin Retail Volume Close To Growing Again: Bullish Sign?

On-chain data shows the demand for using Bitcoin is now neutral from retail investors and could be heading toward a reversal to the upside.

Bitcoin Retail Volume No Longer Plummeting

As explained by an analyst in a CryptoQuant Quicktake post, the demand among the retail investors may be close to growing again. The on-chain indicator of relevance here is the “Retail Investor Demand,” which measures, as its name suggests, the demand for the Bitcoin network that’s present among the smallest of entities.

Since these investors have such small wallets, their transactions tend to be of a small size as well. Thus, the Retail Investor Demand makes use of the collective transaction volume of the small transfers (less than $10,000 in value) to track the activity of this cohort.

Now, here is the chart shared by the quant that shows the trend in the 30-day percentage change of the Bitocin Retail Investor Demand over the last few years:

As displayed in the above graph, the 30-day change in the Bitcoin Retail Investor Demand plunged to a significant negative level earlier in the year, meaning the volume related to small investors was down a large percentage over a 30-day period.

Since this low, though, the metric has been climbing back up and its value is today at almost the 0% mark, implying its drawdown has just about finished. If the same trajectory continues, it’s possible that the indicator should break into the positive territory, which would imply growth in interest from the retail investors.

From the chart, it’s visible that the last time the Retail Investor Demand saw a break into the green zone was just before last year’s rally beyond $100,000. Back then, the volume from these investors had kept rising until hitting a peak of about +30%, which had interestingly nearly coincided with last year’s price top.

It may be no surprise that the asset’s consolidation followed when growth in the volume related to this group disappeared and a decline in activity took over.

Back during the 2021 bull run, the Retail Investor Demand saw a plummet into the negative territory similar to the one witnessed earlier in this year. The indicator then reversed its value in spectacular fashion as it broke past the 0% mark with a sharp surge and kept rising until a notable green level. This turnaround in retail investor coincided with the start of the second half of the 2021 rally.

It now remains to be seen whether retail volume will make a similar comeback this time as well, potentially implying a reignition of bullish momentum for Bitcoin, or if it would take a while more to recover.