Recently, retail investors have shown a cautious attitude towards the cryptocurrency market. This behavior is in stark contrast to previous cycles, when their participation had a significant impact on the industry dynamics.
Experts say that the current reluctance of retail investors to participate in the cryptocurrency market could affect its development trajectory. Nosy co-founder Gustavo Faria pointed out several key indicators that reinforce the view that participation by retail investors remains subdued:
Decisive features of cycle peaks
The popularity of coins held for less than three months
Currently, short-term holders account for about 35% of the realized cap, compared to over 70% during previous market peaks. This demonstrates that “smart money,” or long-term holders of Bitcoin, are maintaining their positions, contributing to a more stable market foundation.
Bitcoin realized cap chart
Historically, the SOPR of short-term holders has exceeded 1.10 during market peaks. In this cycle, the highest recorded SOPR is 1.05, indicating a more neutral market stance.
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Faria also believes that the current market stability reduces the likelihood of an immediate transition into a bear market, and shows potential for further growth.
Short-term Bitcoin holder SOPR
Anthony Sassano, an independent thematic educator, also emphasized the lack of broad market growth typically driven by the participation of retail investors:
Retail and new funds past and present are not here – [all moves are coming] only old crypto users…
2.5 months later, the total market value of all assets outside the top 10 has dropped by 40% (all assets outside BTC and ETH have dropped by 26%)
“Retail” and new funds past and present still do not exist – this is just the biggest PvP for the locals in cryptocurrency
Cryptocurrency analyst Cyclop supports this view, reinforcing the lack of enthusiasm from the retail sector. He pointed out that despite the higher Bitcoin prices, trading volume remains significantly lower than in 2021. The analyst believes that the lack of participation from small investors indicates that the market has not reached the speculative frenzy of previous cycles.
Statement from Cyclops:
The general public has not yet entered the cryptocurrency field. My friends are not messaging me on WhatsApp. My mother does not know that Bitcoin is at historic highs.
Bitcoin trading volume