Bitcoin Retail Activity Remains Low Despite Recent Rally

One
of
the
biggest
questions
in
the
crypto
industry
is
whether
retail
is
participating
in
this
current
rally.
Retail
entrance
often
marks
a
sign
of
euphoria
or
greed
and,
in
some
cases,
is
thought
to
be
a
leading
indicator
of
a
top
in
the
market.

With
bitcoin

(BTC)
gaining
of
late
to
within
15%
of
its
record
high,
this
article
will
explore
what
the
retail
activity
is
indicating.

One
important
indicator
of
retail
participation
is
to
check
where
crypto
exchange
Coinbase’s
(COIN)
app
ranks
in
app
store
downloads.

In
the
2017
and
2021
bull
markets,
Coinbase
became
the
number
one
downloaded
app
near
those
tops,
and
at
bitcoin’s
recent
market
peak
in
March
of
this
year,
it
ranked
in
the
top
5,,
according
to

@CoinbaseAppRankBot.

Coinbase
currently
is
ranked
just
438,
not
far
above
its
lowest
level
of
the
year
of
about
500,
indicating
a
continued
lack
of
retail
interest.

Investors
who
have
bought
bitcoin
within
the
past
155
days
are
considered
short-term
holders
(STHs).

This
cohort
tends
to
be
those
chasing
the
market,
buying
as
the
price
starts
to
climb,
and
history
shows
peaks
tend
to
correlate
with
high
STH
supply.
Indeed,
five
recent
major
tops
in
bitcoin
going
back
more
than
a
decade
have
coincided
with
peaks
in
STH
supply.
This
current
rally,
though,
has
come
alongside
a
decline
in
STH
supply,
suggesting
no
top
as
of
yet.

Looking
at
transfer
volumes
by
size,
values
below
$100,000
are
typically
considered
retail
volume
and
anything
above
that
level
can
be
considered
institutional.

Analyzing
the
past
three
bull
runs,
peak
retail
volume
typically
coincides
at
the
top
of
bull
markets.
Currently,
total
retail
transfer
volume
is
only
around
half
of
what
was
seen
in
the
2024
peak.

Glassnode
data
also
confirms
that
bitcoin
fees
are
at
cycle
lows,
roughly
generating
only
$500k
daily,
while
active
addresses
are
below
the
365-day
moving
average
which
shows
a
lack
of
daily
active
users.

Speculative
trading
on-chain,
either
through
inscriptions
on
bitcoin,
or
transactions
interacting
with
non-fungible
tokens
(NFTs)
on
ether
{ETH}},
is
another
retail
participation
indicator.
In
bull
markets,
we
tend
to
see
high
fee
levels
as
investors
speculate
on-chain,
with
the
2021
market
top
being
a
prime
example.
Currently,
however,
NFT
gas
usage
on
ether
is
only
around
2%
versus
2021
when
the
percentage
of
gas
consumed
was
at
40%,
according
to
Glassnode
data.

A
different
picture
is
suggested
by
the
action
in
memecoins,
where
things
are
exploding.
These
tokens
are
largely
a
retail-driven
category,
according
to
X
account

@MustStopMurad,
which
did
a
presentation
on
the
subject
at
Token
2049.
Murad
shows
that
new
memes
are
up
on
aggregate
by
2,040%
and
old
memes
as
a
whole
are
up
105%
year-to-date.