There is a pattern of less risk aversion on the part of investors.
The same thing happened in March, when bitcoin reached its most recent all-time high.
On-chain analysis of bitcoin (BTC) is indicating an increase in demand from retail investors. This is demonstrated by currency transactions that are less than 10,000 dollars (USD).
Watching transaction volume of up to $10,000 in bitcoin is one way to track small investor activity.. This metric reflects market sentiment among non-institutional participants.
Therefore, it works as a tool to identify the trend of retailers, which is especially important today with their increase in activity. This is highlighted by analyst Cauê Oliveira, head of research at the BlockTrends analysis platform, in a report about it.
“Retailers’ on-chain activity returns after 4 months,” highlights the analyst.
This can be observed in bitcoin transactions of up to USD 10,000, referring to small investors, who increased 13% in the last 30 days.
This growth in retail demand is the highest since February to March when the price of bitcoin rose to $73,700, its all-time high price (ATH).
This can be seen in the following graph from the CryptoQuant on-chain data platform.
The current behavior of retail demand breaks with the decrease it had experienced during the corrective trend in the bitcoin price below USD 70,000. Therefore, it shows that its buying appetite has returned given the recent reactivation of the bullish trend of the currency, according to Oliveira.
Bitcoin registers highest prices for two months
Currently trading around USD 68,000, bitcoin exhibits higher maximum and minimum prices for two months, as reported by CriptoNoticias. This is the opposite of what I was doing the previous five months. Although, as the next chart shows, it still remains within the consolidation range that it has maintained since March below the ATH.
Oliveira highlights that, during the decline in retail demand, the whales (investors with more than 1,000 BTC, an amount equivalent today to USD 68 million) maintained a high number of transactions. Therefore, this factor, together with the price increase, may have boosted the purchasing appetite of small participants.
“This recent price increase in bitcoin is causing small investors to return to trading, signaling the beginning of a pattern of lower risk aversion,” the analyst concludes.
Risk aversion refers to moments of refusal to buy highly volatile assets due to the possibility that their price will fall. When this sentiment decreases, as is currently exhibited, the price of bitcoin tends to rise since it is translated into a scenario of greater demand.
Therefore, the growing demand for bitcoin by small investors, in addition to contributing to the rise in price, provides optimism for its continuity.
