Signs Suggest Retail Markets Stay Passive While Bitcoin Reaches New Heights
Bitcoin (BTC) achieved a new peak at $111,965.80 on May 22, but metrics related to retail participation and on-chain analysis suggest that speculative leverage has not overly influenced current market conditions.
Matt Sigel, head of digital assets research at VanEck, presented data from Bloomberg Intelligence indicating that downloads of crypto-related apps decreased by 14% compared to the same month last year in April.
Specifically, downloads for Binance and Crypto.com fell by 29% and 41%, respectively, while Coinbase experienced a decline of 16%. Sigel stated that these statistics imply that retail investors either “missed the rally” or participated through related stock investments, highlighting that mining stocks absorbed part of the investment flow.
Additionally, Sigel shared insights from Google Trends, indicating that searches for Bitcoin were slightly above 25% on May 20, just prior to the cryptocurrency hitting its latest record.
The downturn in retail trading app downloads is in contrast to spot Bitcoin exchange-traded funds (ETFs), which saw total inflows of $44.5 billion, as reported by Eric Balchunas, a senior analyst for ETFs at Bloomberg.
This number continues from the previous high inflow of $40.3 billion recorded by US Bitcoin ETFs on May 8. It indicates that the recent price surge is primarily driven by institutional interest rather than widespread retail engagement.
On-chain indicators reflect limited speculative fervor
As per Crypto Dan, a community manager at CryptoQuant Korea, while funding rates on major derivatives platforms have increased, they still remain significantly lower than those observed before corrections in March and November 2024.
In a report dated May 22, he highlighted that both futures open interest and liquidations are also below previous highs, suggesting limited leveraged trading.
An analysis of coin age supports this perspective, as the proportion of BTC changing hands within a week to a month has seen only slight growth despite the new price highs. Simultaneously, long-held, dormant coins continue to be retained.
Crypto Dan noted that whales have conducted fewer profit-taking transactions than during earlier peaks, indicating a reduction in selling pressure.
He further pointed out that US-traded spot Bitcoin ETFs experienced positive flows for eight consecutive days leading up to May 21, resulting in total holdings surpassing 1.2 million BTC.
This persistent demand combined with a lack of retail exuberance may suggest that price discovery could continue if risk appetite expands.
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