Bitcoin Retail Reaches Second-Highest Buying Rate In History. Good Or Bad?

Bitcoin retail buying rates have been surging in recent times. These metrics show how much Bitcoin retail investors are buying and at what prices they are purchasing these tokens. Now, this metric had hit a previous all-time high in 2017/2018 right at the peak of the bull market at that point. Since the same thing is happening once more and retail investors are ramping up purchases, it remains to see whether this will correlate with another bull rally that sends the digital asset towards a new all-time high.

Retail Investors Ramp Up

In a chart that was posted to Twitter, market analyst Will Clemente showed that retail investors are currently purchasing the cryptocurrency at the second-highest rate in history. This is significant when looked at from the perspective of the last time retail buying surged past this point. However, it does not only spell good news even from a historical point of view. 

Related Reading | Bitcoin Exchange Outflows Suggest Rally May Only Be Starting

Clemente noted that most spikes in the holdings of retail investors have usually coincided with that of macro tops. However, there have also been times when these investors had taken a more strategic approach to their buying. As for this one, the analyst explains that it is an outlier.

This is a really interesting chart. Retail (0-1 BTC) is currently buying at the second-highest rate in Bitcoin's history.

Looking at retail's holdings most spikes have coincided with macro tops, but on several occasions, they have bought strategically. This spike is an outlier. pic.twitter.com/PcGxsoCVku

— Will Clemente (@WClementeIII) April 4, 2022

The most important part of this is that there is no clear indicator of where the price might go in response to this. Not only can it be a bullish signal that could precede another top, but it can also very well lead to another bottom. 

“Either we are doomed or retail has chosen to use Bitcoin as a savings account and opt out of the fiat system,” said Will Clemente. “The optimist in me hopes it is the latter.”

Bitcoin Ready For Another Rally?

Bitcoin halving events have also led to a surge in the value of the digital asset. However, there are the mid-halving events that can also be significant for the price of the digital asset. Usually, after a halving event, the peak is reached between 515 and 545 days after. So far, bitcoin has moved past this point once the new year was ushered in, which meant that the next significant event was the mid-halving. 

BTC falls to $45k | Source: BTCUSD on TradingView.com

This event can have some dire implications for the digital asset if history is to be believed. The last mid-halving event saw the price of bitcoin fall drastically after July 2018. It is no secret that what followed was a drawn-out bear market.

Related Reading | Dogecoin Soared After Elon Musk Bought 9.2% Of Twitter, What’s Next?

The last #Bitcoin halving occurred in May, 2020. After surges, price tops historically occur 515 to 545 days after $BTC's supply is cut in half, causing more scarcity. Next week we're due for a mid-halving event. Read about what historically happens! https://t.co/qvBoQHfxhL pic.twitter.com/eTp9cDNgoO

— Santiment (@santimentfeed) April 4, 2022

With current market momentum, bitcoin looks to be sticking to this pattern historically given that it has failed to break through the $50K resistance point. Santiment notes that the next mid-halving event will take place on April 11th. So BTC will either have to rise above this next resistance or risk a downtrend that could see it fall to $30,000 once more.

Featured image from The Crypto Basic, chart from TradingView.com