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Bitcoin News
Retail Losing Interest In Bitcoin? Volume Plunges 30%
On-chain data shows the Bitcoin transfer volume of retail investors has seen a sharp decline recently, a sign that this group may be losing interest.
Bitcoin Volume For Retail-Sized Transactions Has Plunged Recently
As explained by CrypoQuant author Axel Adler Jr in a new post on X, the total BTC transfer volume for transactions valued between ,000 and ,000 has gone down recently.
The “transfer volume” here refers to the total amount of Bitcoin (in USD) that addresses on the network are moving around daily. This metric isn’t confused with the “trading volume,” which typically keeps track of only the volume involved in trades on spot exchanges.
When the value of the transfer volume is high, it means the users are moving around large amounts on the blockchain right now. Such a trend implies that investors are actively interested in trading the asset.
On the other hand, the low metric suggests that holders may not pay attention to the cryptocurrency as they aren’t participating in much activity on the network.
Now, here is a chart that shows the trend in the 30-day moving average (MA) Bitcoin transfer volume specifically for the transactions involving the movement of coins worth at least ,000 and at most ,000:
As displayed in the above graph, the Bitcoin transfer volume for transactions of this size spiked to relatively high levels during the rally earlier in the year.
The ,000 to ,000-sized transfers are considered relatively small, so their volume would reflect the level of activity of the smallest of investors in the market: retail.
The increase in this metric from earlier in the year would suggest the price surge ignited interest in the asset from these investors. The chart shows that a similar trend was also observed during the previous bull run.
Sharp price action is generally exciting to retail investors, so it’s not surprising that they tend to become more active during rallies. This increased interest is what makes any surge sustainable for extended periods. As such, only rallies that can attract retail interest can hope to last.
As the chart shows, the Bitcoin transfer volume for retail-sized moves peaked in May and has since seen a sharp drawdown of 30%. This would mean that the bearish price action has made these investors disappear.
Interestingly, the downtrend in the indicator persisted even when Bitcoin had made a recovery back above ,000 a few weeks ago, which could have been a potential foreshadowing that this rally would never stay.
With the 30-day retail transfer volume floating at the same lows as during the bearish period in July 2021, any new recovery runs could also be set up for failure unless the indicator shows a revival.
BTC Price
At the time of writing, Bitcoin is trading at around ,200, down over 4% in the past week.
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Bitcoin News
Ethereum Set For $5,000? ETH Open Interest Expanding On CME Ahead Of Spot ETFs Trading
Ethereum is tracking lower when writing, sinking roughly 18% from March 2024 highs. Even though bears appear to be in control at spot rates, keeping the second most valuable coin below ,700, confidence is high among analysts.
ETH Futures Open Interest Rising On CME
Taking to X, one of them noted that there are solid signs that institutions are positioning themselves to push prices higher. Citing rising open interest in Ethereum Futures at CME, a bourse, the analyst said it is highly likely that the “big money” is accumulating ETH, taking advantage of the recent correction.
To reassert this outlook, the analyst said the trend observed from the Ethereum CME futures contracts’ open interest is a reliable telltale sign.
Notably, this trend mirrors what transpired with Bitcoin futures before the launch of spot Bitcoin exchange-traded funds (ETFs). For this reason, the analyst is convinced that a similar pattern is printing for Ethereum.
Currently, Ethereum is printing discouraging lower lows. Sellers have been resilient, deflating any momentum buildup and placing caps on bulls.
So far, it is emerging that ,700 is a resistance level for traders to monitor closely. Bulls did not launch a counter once it was broken on June 7, and the bear breakout was confirmed four days later on June 11.
Despite the current market conditions, the launch of Ethereum spot ETFs could still drive prices to new heights. The analyst predicts a potential expansion to ,000, confirming the Q1 2024 trend and the breakout above the current flag.
Still, whether bulls will be in control depends on how price action pans out. Technically, open interest shows the cumulative summation of both open or long-leveraged positions. If buyers push prices to rise, ETH should expand in the coming days, even breaking ,700 this week.
Spot Ethereum ETF Optimism: Will They Be A Success?
Beyond this, the recent flurry of activity surrounding spot Ethereum ETF applications bolsters this optimism. On June 21, seven applicants, whose 19b-4 forms were recently approved, submitted amended S-1 registration statements with the United States Securities and Exchange Commission (SEC). Analysts now think the regulator could approve the trading of these products by early July 2024.
While bullish for Ethereum, some analysts are not convinced they will enjoy similar success as those seen when spot Bitcoin ETFs began trading. Eric Balchunas, Senior ETF analyst at Bloomberg, predicted that spot Ethereum ETF would succeed if it grabs just 20% of all the capital inflow going to its Bitcoin counterpart.
SEC Drama Fuels XRP Rally: Open Interest Skyrockets
The cryptocurrency XRP is making waves as open interest (OI) for the token experiences a dramatic rise. This surge in investor positioning coincides with the ongoing legal battle between Ripple Labs, the company behind XRP, and the US Securities and Exchange Commission (SEC).
Bullish Bets On The Horizon
Cryptocurrency analysis platform CryptoQuant detected a significant increase in XRP’s open interest, indicating a growing number of investors entering positions. This trend suggests a bullish sentiment, with investors betting on a potential price appreciation for XRP in the near future. The logic is simple: more investors entering the market with buy orders typically drives the price upwards.
Recent developments in the SEC lawsuit, which accuses Ripple of selling unregistered securities in the form of XRP, seem to be buoying investor confidence. A recent court decision, for instance, may have provided some clarity on the legal classification of XRP, potentially paving the way for a more favorable outcome for Ripple.
Volatility Ahead: Potential Market Swirls
While the surge in open interest is a positive sign for XRP bulls, CryptoQuant warns of potential market volatility on the horizon. Rising open interest can be a double-edged sword. It indicates increased market activity, but it can also lead to higher volatility.
A market with high open interest can resemble a busy intersection. Increased activity can lead to more opportunities, but it also raises the risk of sudden changes. Just as drivers need to be extra cautious at a crowded intersection, investors in a market with high open interest need to be prepared for potential volatility as new information or shifting market sentiment prompts investors to adjust their positions quickly.
This potential volatility underscores the importance of caution for XRP investors. While the current trend suggests optimism, it’s crucial to remember that the outcome of the SEC lawsuit remains uncertain and the broader cryptocurrency market is inherently volatile.
XRP Price Prediction
Meanwhile, XRP is predicted to rise by 21% to reach .602 by July 19, 2024. Despite this optimistic forecast, the current market sentiment remains bearish, indicating caution among traders. However, the Fear & Greed Index at 64 shows a state of greed, suggesting positive market activity and buying interest despite the prevailing caution.
In the past 30 days, XRP has seen 14 green days, or 47% of the period, indicating moderate positivity. The price volatility over this period has been 3.67%, which is relatively moderate for a cryptocurrency.
Featured image from Search Engine Land, chart from TradingView
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