Despite the price resilience of Bitcoin, the market inactivity of a certain class of investors known as retail investors has persisted over the past few weeks. According to the latest on-chain data, the absence of this investor cohort is leading to a rare phenomenon on the Bitcoin network.
For context, the mempool refers to a temporary storage area where pending BTC transactions wait to be confirmed. The mempool is typically congested during periods of elevated on-chain demand and network activity, as several transactions await processing.
According to Joao Wedson, this occurrence is a clear sign that retail investors have stayed out of the market over the past few months — as the almost nonexistent backlog reflects reduced demand for the Bitcoin network. Hence, a future increase in the mempool transactions could mean a return of retail demand to the market.
Typically, low transaction activity and an almost empty mempool are not a good sign for the price of BTC, as it reflects low demand from retail investors. However, there is no denying the shift in the market since the launch of the spot BTC exchange-traded funds (ETF)
As of this writing, the price of BTC stands at around $107,700, reflecting an almost 2% decline in the past 24 hours. According to data from CoinGecko, the flagship cryptocurrency is up by almost 5% in the past two weeks.
