- Bitcoin surged to $58,000, signaling improved retail trader sentiment, according to Santiment.
- Wallets with less than one Bitcoin hold their largest share of total supply in seven months, reflecting increased small-scale investor activity.
- A bullish setup may require fewer small wallets, more mid-sized wallets, and aggressive accumulation by large Bitcoin holders.
Bitcoin rose to $58,000 today, which is a positive sign for the retail traders, as suggested by the analytics firm Santiment. The platform also revealed that the share of wallets with less than one Bitcoin in them was the highest in the last seven months in terms of the total supply. This increase in small investors shows that there is a better performance in the retail trading as the leading cryptocurrency gains traction.
However, to achieve the feat of challenging the all-time high, a different dynamic may be required for the number of wallets holding less than one Bitcoin. The findings indicate that a bullish setup would entail a reduction in the number of small wallets.
Also, it would necessitate an increase in the wallets with one to 100 BTC and aggressive buying from the holders with 100 or more Bitcoins. These distribution shifts are important to support a long-term trend in the price of cryptocurrency.
Bitcoin Leverage Spikes
Another important trend observed in the Bitcoin market is the increase in leverage trading. Data provided by the analytical service CryptoQuant showed that the Estimated Leverage Ratio (ELR) for BTC has reached its peak for this year. This metric compares the Open Interest in the exchanges with their reserve of BTC and It shows the level of leverage that is being used across the Derivative market. At the time of writing, BTC has been priced at $57,606.
The leverage ratio has been on the rise which indicates the fact that more and more investors are approaching the market with borrowed money, which can also mean they are at higher risk of losses due to the change in price. This increasing tendency toward higher leverage may imply more optimism regarding the further development of Bitcoin’s price.
However, it may also result in more price fluctuations in the market as has been seen in the recent past. As the leverage increases, the tendency for bigger price changes also increases and this is especially the case if the market is characterized by big gains or losses in a short space of time.
As Bitcoin keeps on rising, traders are keen on these trends as seen above. The change in the retail investors’ perception along with the rising levels of leverage can potentially define the next phase of BTC’s movement in terms of either continued appreciation or higher volatility.
