Speculative trading on-chain, involving inscriptions on bitcoin or transactions with NFTs on ether, is a retail participation indicator. High fee levels in bull markets suggest increased on-chain speculation, as seen in the 2021 market peak. Currently, NFT gas usage on ether is only at 2%, compared to 40% in 2021, according to Glassnode data. This suggests lower levels of speculative trading in the current market.
This article originally appeared on www.coindesk.com
Bitcoin, the world’s most popular cryptocurrency, has been on a rollercoaster ride in recent months. After reaching an all-time high of nearly $65,000 in April, the price of Bitcoin crashed to around $30,000 in just a matter of weeks. However, there are signs that Bitcoin’s price could be on the rise once again, based on low retail activity.
Retail investors, or individual investors who buy and sell assets for their own personal accounts, have historically had a significant impact on the price of Bitcoin. When retail activity is high, it can drive up the price of Bitcoin as more and more individuals jump on the bandwagon. Conversely, low retail activity can lead to a decrease in the price of Bitcoin as there is less demand for the cryptocurrency.
Recent data shows that retail interest in Bitcoin has waned in recent weeks, with searches for “Bitcoin” on Google hitting a one-year low in August. This could be a sign that retail investors are hesitant to jump back into the market after the recent price crash. However, some analysts believe that this could actually be a bullish sign for Bitcoin.
When retail activity is low, it can create a buying opportunity for institutional investors, who have deep pockets and often have a longer-term investment horizon. Institutional investors have been increasingly interested in Bitcoin as a hedge against inflation and a store of value, with companies like Tesla and Square adding Bitcoin to their balance sheets.
If institutional investors continue to buy up Bitcoin at low prices, it could help to drive the price of the cryptocurrency higher in the coming months. This is because institutional investors typically buy and hold assets for longer periods of time, which can create a more stable and sustainable uptrend in the price of Bitcoin.
In addition, the recent approval of the first Bitcoin ETF in Canada could further fuel institutional interest in Bitcoin. The Bitcoin ETF, which allows investors to gain exposure to Bitcoin without having to buy and store the cryptocurrency themselves, could open the door for more institutional money to flow into the market.
Overall, while the price of Bitcoin remains volatile and unpredictable, there are signs that it could be on the rise once again based on low retail activity. Institutional investors continue to show interest in Bitcoin as a hedge against inflation and a store of value, which could help to drive the price of the cryptocurrency higher in the coming months. Investors should keep an eye on market trends and developments to see how the price of Bitcoin unfolds in the near future.
Source link
