- CryptoQuant analysts warned that bitcoin’s move toward $80,000, at the time of their analysis, was driven by strong retail activity but lacked sufficient support from U.S. institutional spot demand.
- The analysts said the divergence matters because leveraged retail buying, a negative Coinbase premium and fading price momentum could increase the risk of a long squeeze.
- A separate CryptoQuant analysis found no abnormal increase in large bitcoin deposits to spot exchanges during the recovery.
Bitcoin traded at about $79,500 at the time of the analysis, while the Fear and Greed Index stood at 66, placing it in the greed zone. CryptoQuant data indicated a divergence between optimistic retail traders and large market participants as the cryptocurrency approached $80,000.
Retail traders buy amid market greed
CryptoQuant experts said the price increase coincided with heightened retail-trader activity. The daily TBSR indicator stood at 1.12, which CryptoQuant said pointed to active leveraged market buying and positive funding.
According to the analysts, that behavior can create liquidity for large market participants taking positions in the opposite direction.
Institutional demand does not confirm the rally
CryptoQuant identified the negative Coinbase premium as a key signal, saying it suggested insufficient spot demand from U.S. institutional investors.
The Exchange Whale Ratio provided another warning signal, according to the firm. The metric reached 0.93 on the hourly timeframe, indicating that large transfers accounted for a significant share of total bitcoin inflows to exchanges.
CryptoQuant said the combination of high retail activity and weaker institutional demand created a risk that spot capital did not sufficiently support the price increase. The analysts also pointed to fading price momentum and warned of a possible long squeeze, in which a sharp decline could force the liquidation of traders’ positions betting on further gains.
Large exchange deposits remain near recent levels
A separate CryptoQuant analysis did not find a large-scale inflow of bitcoin to spot exchanges.
Bitcoin closed at $78,450 on Sept. 8. On that day, the 10 largest daily inflows to spot exchanges totaled 5,442 BTC, according to the analysis.
The total was 4.4 times the previous day’s figure but only 5.1% above the average for the preceding 30 days. The seven-day average was 4,678 BTC, below several peaks recorded earlier this year.
CryptoQuant therefore said bitcoin’s recovery was not accompanied by abnormally high large-deposit activity, providing limited grounds to conclude that large transfers to exchanges were increasing potential selling pressure.
The firm recommended monitoring the seven-day average inflow. A sustained rise in that measure alongside a weakening bitcoin price could signal increasing selling pressure, it said.
For now, the analysts concluded that the Sept. 8 deposit increase was more consistent with a return to recent activity levels than with an abnormal surge.
Source: Incrypted
