Bitcoin’s price has been trapped within a range below $70,000 for quite some time now. Attempts to surpass this level have been brief and unsuccessful as the digital asset failed to maintain the upward momentum.
Interestingly, new research revealed that the retail crowd is not here yet.
Bitcoin Retail Crowd Not Here Yet
According to CryptoQuant’s latest analysis, the current BTC market cycle has not yet reached its peak euphoria stage. An important characteristic of previous cycle tops was the dominance of coins held for less than 3 months, indicating that long-term holders (smart money) had already taken profits. This has left the market controlled by speculators and new entrants. Such a scenario results in greater volatility.
In the current cycle, however, BTC held for less than 3 months accounts for only about 35% of the realized cap, and as per CryptoQuant, this level is comparable to the early stages of previous bull markets.
Additionally, the realized profit level among short-term holders, measured by the SOPR, has not yet exceeded the historical peak levels seen at earlier cycle tops, and the current market structure was dominated primarily by the long-term holders forming a solid price support base.
Such a case presents a silver lining amid a lackluster market because of a “relative scarcity” of short-term holders, suggesting that an abrupt transition to a bear market is less likely and there is still potential for a price rally.
“This robust structure and the relative scarcity of short-term holders make an immediate transition to a bear market less likely, indicating that there is still potential for a significant rally before the cycle top formation.”
Bitcoin Holders Show Fear
Despite hints of further upside potential, BTC holders experienced the biggest 3-day drop in non-empty wallets, which coincided with a slide in its price.
Santiment said that this could likely encourage traders to liquidate their holdings out of fear of further price drops.
The same cannot be said for Ethereum wallets, on the other hand, which continued to grow, indicating sustained interest and accumulation in the largest altcoin. This divergence in wallet activity suggests that bitcoin is currently facing selling pressure.