Analyzing retail investors’ growing faith in Bitcoin [BTC] as prices soar

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  • Retail investors’ inter­est in Bit­coin increased.
  • Increase in prof­itabil­i­ty and poten­tial for increased sell­ing pres­sure for BTC.

Since the Ter­ra Luna [LUNC] col­lapse, the num­ber of Bit­coin [BTC] retail investors con­tin­ued to rise and stood at 17.1% of the total cir­cu­lat­ing sup­ply at press time, accord­ing to Glassnode.

Source: Glassnode

Read Bitcoin’s [BTC] Price Pre­dic­tion 2023–2024

This rep­re­sent­ed a 4.4% increase over the past eight months, which was a pos­i­tive sign for the decen­tral­iza­tion of the Bit­coin net­work, as it sug­gest­ed that it was not as con­trolled by large “whale” investors.

Holders get tempted

In addi­tion to the grow­ing num­ber of retail investors, the num­ber of investors in prof­it also increased dur­ing this period.

Accord­ing to Glassnode’s data, the per­cent­age of short-term hold­ers in prof­it reached 92%. How­ev­er, this could impact the sell­ing pres­sure on Bit­coin, as many short-term hold­ers may choose to sell their BTC for a prof­it, which could even­tu­al­ly affect retail holders.

Source: glassnode

Despite the grow­ing prof­itabil­i­ty of Bit­coin and the poten­tial for increased sell­ing pres­sure, data sug­gest­ed that the sell­ing pres­sure may not have increased yet.

Accord­ing to data pro­vid­ed by Cryp­to­Quant, the exchange reserve con­tin­ued to decline. The exchange reserve is the amount of Bit­coin held by exchanges and is a key indi­ca­tor of sell­ing pres­sure. A decline in the exchange reserve sug­gests low sell­ing pressure.

Source: Cryp­to­Quant

BTC activity declines

How­ev­er, things could take a turn for the worse for BTC soon. One wor­ry­ing indi­ca­tor was the decline in Bit­coin address­es activ­i­ty. Accord­ing to infor­ma­tion pro­vid­ed by Cryp­to­Quant, the num­ber of active address­es on the Bit­coin net­work decreased by 27.64% in the last 24 hours.

Addi­tion­al­ly, Bit­coin‘s veloc­i­ty fell sharply as well, indi­cat­ing that the fre­quen­cy of BTC trans­fers among address­es has decreased.

How many are 1,10,100 BTC worth today?

Source: San­ti­ment

Despite this decline in activ­i­ty, traders con­tin­ued to go long on Bit­coin at press time. Accord­ing to data pro­vid­ed by Coin­glass, trad­er sen­ti­ment towards the king coin turned pos­i­tive over the last few days, and at the time of writ­ing, 51.92% of all trades were long posi­tions made in favor of Bitcoin.

It remains to be seen if hold­ers cave into the sell­ing pres­sure or if they con­tin­ue to HODL BTC. At the time of writ­ing, Bit­coin was trad­ing at $23,082.73 and its price grew by 1.56% in the last 24 hours, as per Coin­Mar­ket­Cap.

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