On-chain data shows that the volume of Bitcoin transfers by retail investors has recently seen a sharp decline, a sign that this group may be losing interest.
Bitcoin retail transaction volume has recently plummeted
As CrypoQuant author Axel Adler Jr. explains in a new post on X, the total BTC transfer volume for transactions between $1,000 and $10,000 has been decreasing recently.
“Transfer volume” here refers to the total amount of Bitcoin (in USD) that addresses on the network move daily. This metric is not to be confused with “trading volume,” which typically only tracks the volume involved in spot exchange trading.
When the transfer volume value is high, it means that users are moving large amounts on the blockchain at this time. This trend implies that investors are actively interested in trading the asset.
On the other hand, the low value suggests that holders may not pay attention to the cryptocurrency as they do not participate in much activity on the network.
Here is a chart showing the 30-day moving average (MA) of Bitcoin transfer volume, specifically for transactions involving the movement of coins worth at least $1,000 and at most $10,000:
As shown in the chart above, Bitcoin transfer volumes for transactions of this size reached relatively high levels during the recovery at the beginning of the year.
Transfers between $1,000 and $10,000 are considered relatively small, so their volume would reflect the level of activity of the smallest of investors in the market: retail trading.
The increase in this metric compared to the beginning of the year would suggest that the price surge has sparked interest in the asset by these investors. The chart shows that a similar trend was also observed during the previous bull run.
Sharp price action is usually exciting for retail investors, so it is not surprising that they tend to become more active during rallies. This increased interest is what makes each rally sustainable for extended periods. Therefore, only rallies that can attract retail interest can hope to last.
As the chart shows, Bitcoin transfer volume for retail-sized movements peaked in May and has since seen a sharp 30% decline. This would mean that the bearish price action has wiped out these investors.
Interestingly, the indicator’s downtrend persisted even when Bitcoin had recovered above $70,000 a few weeks ago, which could have been a potential harbinger that this rally would never last.
With 30-day retail transfer volume hovering around the same lows as in the July 2021 bear market, any new recovery phase could also prove doomed unless the indicator shows a recovery.
BTC Price
At the time of writing, Bitcoin is trading around $62,200, down more than 4% from last week.
