Bitcoin (BTC) Price Prediction: Retail Investors Disappear as Smart Money Accumulates

Bitcoin (BTC) has struggled to break the $100k barrier despite the recent price pump. This volatility is largely associated with declining retail interest as the market seeks stability.

Bitcoin’s retail investors disappeared from the market as soon as they arrived.

As Bitcoin’s price approached the $100,000 mark, retail investors flocked to the market, eager to capitalize on the rising asset. However, their presence was short-lived.

According to CryptoQuant’s 30-day retail demand variation metric, retail demand surged by over 30% as BTC approached $100,000.

This metric measures the change in retail demand over a 30-day period, providing insight into the level of interest from smaller investors in the market.

A surge in retail demand typically signals heightened interest, enthusiasm, or FOMO (fear of missing out) among smaller investors.

Historically, when retail demand variation exceeds 15%, it often precedes a local top.

This is what happened after Bitcoin reached its new all-time high of $108,000. After reaching this level, the market corrected, with retail demand dropping by 16%.

Retail investors are known for being emotional reactors and quickly entering and exiting their positions during market corrections.

A drop below 10% indicates that retail interest has dropped significantly, presenting a buying opportunity for large and experienced traders.

After such declines, the market has frequently experienced a bullish rebound as weak hands capitulate and stronger hands accumulate.

What does this mean for BTC?

According to AMBCrypto’s analysis, Bitcoin is experiencing a shift in market activity from retail traders to smart money accumulation.

This drop in retail demand signals that markets are cooling off after a speculative frenzy.

Hence, BTC has moved from weaker hands to stronger hands.

The recent drop in the Spent Output Profit Ratio (SOPR) indicates a shift in ownership and market activity.

Despite the decline, the SOPR remains at 1.01, signaling that holders are not willing to sell at a loss.

This market behavior suggests stronger hands in the market, indicating that investors are confident in holding their positions even during market corrections.

This accumulation trend is further evidenced by the decline in the exchange whale ratio.

The whales’ supply to exchanges has dropped to 0.37, signaling HODL behavior.

Whales are sending their BTC tokens to private wallets, indicating bullish sentiment as they anticipate further gains.

Simply put, the drop in retail demand has presented an opportunity for large holders to accumulate BTC at lower prices.

These conditions bode well for Bitcoin to reclaim the $98,700 level. A move above this level will strengthen Bitcoin to reclaim the $100,000 level.

Conversely, another market correction could see BTC drop to the $96,100 support level.