On-chain data analysis firm CryptoQuant has reported a notable increase in retail investor interest in Bitcoin throughout October 2024, following a slowdown in activity during the summer months. According to CryptoQuant’s Retail Investor Demand Change metric, retail demand for Bitcoin grew by 13% over the past 30 days, nearing levels last seen in March, just before Bitcoin’s all-time high.
“The growth in retail demand is reminiscent of what we observed in March when the market was near its historical peak,” CryptoQuant analysts said in a report released Tuesday.
CryptoQuant’s Head of Research, Julio Moreno, highlighted that the recent surge in retail demand is occurring in parallel with increasing institutional interest. Moreno pointed out that while institutional investors have been gradually increasing their exposure to Bitcoin throughout the year, retail investors are now returning to the market after several months of diminished activity.
“This dynamic mirrors previous Bitcoin market cycles,” Moreno explained. “In 2017, retail investors aggressively accumulated Bitcoin after it surpassed its previous all-time high, continuing to buy as the price soared towards $20,000. We may be seeing a similar renewed optimism from smaller investors.”
CryptoQuant tracks retail investor demand by monitoring key indicators such as the total amount of Bitcoin held in wallets with less than one Bitcoin. This amount has grown from 1.734 million BTC in mid-March to 1.752 million BTC in October, an increase of 18,000 BTC. Another metric used is the volume of on-chain transactions valued at less than $10,000, reflecting activity from non-institutional participants.
Alongside the rise in retail activity, institutional demand has also been climbing, with spot Bitcoin exchange-traded funds (ETFs) seeing increasing inflows. By mid-October, cumulative net inflows into spot Bitcoin ETFs had surpassed $21 billion. However, after seven consecutive days of positive net inflows, ETF activity reversed, reporting net outflows of $79.09 million on Tuesday. The largest outflow was from Ark and 21Shares’ ARKB, which saw $134.74 million leave the fund.
Despite the boost in confidence that these inflows bring, analysts at Bitfinex expressed caution. “Previous attempts by Bitcoin to break past the $70,000 level have failed, even when accompanied by large ETF inflows. The historical volatility of Bitcoin prices suggests further fluctuations are likely,” Bitfinex analysts told The Block.
As retail and institutional interest continues to grow, the market remains closely watched by analysts and traders alike, with many looking to see if Bitcoin can sustain its momentum and push past significant resistance levels.