In the current crypto market rally, one of the biggest questions on everyone’s mind is whether retail participation is involved. Retail entrance often marks a sign of euphoria or greed and can be a leading indicator of a top in the market. With bitcoin (BTC) gaining ground to within 15% of its record high, this article will explore what the retail activity is indicating.
Coinbase Rankings
One important indicator of retail participation is to check where crypto exchange Coinbase’s (COIN) app ranks in app store downloads. In previous bull markets in 2017 and 2021, the Coinbase app was ranked number one in downloads. However, as of now, it has dropped significantly to rank 438, not far above its lowest level of the year.
Current Retail Interest: A Lackluster Picture
According to data from @CoinbaseAppRankBot, Coinbase’s current ranking is a stark contrast to its previous performances near market tops. This indicates a continued lack of retail interest in the crypto market.
Short-Term Holder Supply
Investors who have bought bitcoin within the past 155 days are considered short-term holders (STHs). This cohort tends to be those chasing the market, buying as the price starts to climb. History shows that peaks tend to correlate with high STH supply.
However, in this current rally, there has been a decline in STH supply, suggesting no top as of yet. The graph below illustrates the trend:
BTC: Short Term Holder Supply (Glassnode)
Retail Activity by Volume
Looking at transfer volumes by size, values below $100,000 are typically considered retail volume and anything above that level can be considered institutional. Analyzing the past three bull runs, peak retail volume typically coincides at the top of bull markets.
Currently, total retail transfer volume is only around half of what was seen in the 2024 peak. The graph below shows the trend:
BTC: Total Transfer Volume (Glassnode)
Active Addresses and Fees
Glassnode data also confirms that bitcoin fees are at cycle lows, roughly generating only $500k daily. Active addresses are below the 365-day moving average, which shows a lack of daily active users.
Bitcoin Active Address Momentum (Glassnode)
NFT Gas Usage on Ether
Speculative trading on-chain, either through inscriptions on bitcoin or transactions interacting with non-fungible tokens (NFTs) on ether {ETH}}, is another retail participation indicator. In bull markets, we tend to see high fee levels as investors speculate on-chain.
However, currently, NFT gas usage on ether is only around 2% versus 2021 when the percentage of gas consumed was at 40%, according to Glassnode data.
Ether Gas Usage by NFTs (Glassnode)
Memecoin Activity
A different picture is suggested by the action in memecoins, where things are exploding. These tokens are largely a retail-driven category.
According to X account@MustStopMurad, new memes are up on aggregate by 2,040% and old memes as a whole are up 105% year-to-date.
Crypto Returns Year To Date (@MustStopMurad)
In conclusion, the current retail activity in the crypto market suggests a lack of participation from retail investors. The decline in STH supply and low retail transfer volumes are indicators that the market is still in its early stages.
The surge in memecoin activity, on the other hand, paints a different picture. With new memes up 2,040% year-to-date and old memes up 105%, it’s clear that retail investors are driving this category forward.
As the crypto market continues to rally, it’s essential to keep an eye on these indicators and adjust strategies accordingly. Whether you’re a seasoned investor or just starting out, staying informed is crucial in navigating the ever-changing landscape of cryptocurrency.
