After an unsuccessful attempt to break above the $70,000 level this week, bitcoin prices briefly fell below $67,000 before making a moderate recovery.
Despite the brief decline, the data showed renewed interest from retail investors, which is usually seen as a strong indicator of broader market sentiment.
CryptoQuant's latest analysis reveals a resurgence of on-chain retail activity after four months of decline. One of the key indicators is the amount of on-chain transactions below $10,000, which reflects the involvement of small and non-institutional investors. These transactions are highly sensitive to market sentiment and often react to news more than underlying fundamentals, helping to gauge capital flows among retail participants.
In the past 30 days, retail demand has increased by 13%. This is a significant change compared to the previous few months which showed a decrease in activity. CryptoQuant analysis notes that this level of engagement was last seen in March when bitcoin was nearing its most recent all-time high.
During this period of less attention, large investors or 'whales' continue to maintain high transaction volumes, increasing the number of BTC as retail activity decreases. Recent gains in bitcoin prices have revived interest from small investors, pointing to lower downside risk and the potential for more retail-driven momentum going forward.
So far this year, bitcoin has risen by 60%, jumping from $42,280 at the start of the year to $67,000. In the month of October alone, the price of BTC has increased by 8%.
Several factors support this bullish trend. Apart from the increased activity of large investors, investors are increasing the possibility of a rate cut by the Federal Reserve in November in their expectations.
This optimism is also enhanced by the increasing chances of pro-crypto Donald Trump in the 2024 presidential race. Additionally, the Fear and Greed Index continues to reflect traders' strong confidence in Bitcoin.
Ted Pillows' latest tweet also offers an optimistic view of the trajectory of the bitcoin market. He said that the downtrend has officially ended, marking the beginning of a new phase for BTC holders.
According to the market analyst, this asset has now passed the period of consolidation and accumulation, indicating that it may be preparing to enter a parabolic phase.
Another market analyst, Doctor Magic, highlighted the steady decline in stablecoin dominance since mid-2024. This kind of pattern usually precedes significant price increases in major cryptocurrencies, including bitcoin.
The decline in stablecoin dominance suggests that investors believe BTC will gain value against the USD, indicating rising investor confidence and growing risk appetite as the market prepares for its next move.
