Retail Bitcoin Activity Remains Low as Whales Accumulate Ahead of October's Bullish Potential

Retail trader activity for Bitcoin is currently at normal levels. However, these levels are lower than what we've seen during past bull and bear markets. Data from crypto exchanges like OKX and Binance shows this trend.

Many believe the market is waiting for retail investors to step in and provide exit liquidity. At the same time, new whales are accumulating BTC from older holders. This behavior often happens before retail traders jump in when Bitcoin prices start to hit new highs.

As we enter October, retail investors are lagging behind institutional players in increasing their Bitcoin (BTC) purchases. Historically, October has been a bullish month for Bitcoin. Yet, net inflows from smaller investors remain at typical levels. Meanwhile, larger investors are ramping up their buying.

Data from popular exchanges like OKX and Binance shows minimal activity compared to the bull markets of 2021 and 2022. In fact, current activity is even lower than during the bear market of 2019-2020.

This restraint is surprising. Since 2013, October has only ended in the red twice. It has seen gains as high as 60% and an average of 22%. This makes it the best month for investor returns. Recently, fewer than 40,000 wallets have been active each day on these exchanges. That’s even lower than during the bear market when Bitcoin was below $10,000, with about 50,000 active wallets daily.

These figures align with other indicators, like the usage of the Coinbase mobile app and on-chain activity. “We’re in the middle of a bull cycle, waiting for retail exit liquidity, while new whales are accumulating BTC from old whales,” said CryptoQuant founder Ki Young Ju in a post on X.

Retail traders, often called individual traders, buy or sell assets for their personal accounts. On the other hand, institutional traders manage accounts for groups or institutions. They’re often referred to as “whales” due to their significant influence in the market.

Retail traders are often seen as less informed or more emotionally driven than institutional investors. A significant influx of retail money can signal bullish sentiment. This means there’s a general belief that prices will rise. However, extremely high retail inflows might indicate an overheated market. This could mean the end of a rally or market cycle.

Early signs of increasing retail inflow might suggest the end of a bear market and the start of an accumulation phase. Sudden spikes in retail buying can sometimes precede market peaks, followed by corrections when these investors start selling out of fear or to take profits.

As Ki noted, retail traders “usually enter when the BTC price is skyrocketing and reaching an all-time high.”