New data has revealed a steep drop in activity from small-scale Bitcoin (BTC) investors on major trading platforms, with Binance experiencing an 80% collapse in daily deposits from this group since early 2023.
Some market watchers are seeing the shift as a fundamental change in market structure, where traditional retail participation is being replaced by institutional vehicles and long-term holding strategies.
The Great Retail Retreat
According to an analysis shared by CryptoQuant analyst Darkfost, the flow of Bitcoin into Binance from addresses that hold less than 0.1 BTC, often called “shrimps,” has fallen off a cliff.
The 90-day moving average of daily deposits from these small holders has been cut by more than five times, dropping from roughly 552 BTC at the start of 2023 to just 92 BTC now. This trend gained even more speed after spot ETFs started trading in January 2024. Before their launch, the daily average was around 450 BTC, meaning the drop to 92 BTC represents a steep and continuing decline.
Darkfost identified three main factors driving this collapse. First, he claimed a portion of retail investors now prefer to get Bitcoin exposure through ETFs, bypassing the need to use an exchange like Binance altogether. Second, small holders of Bitcoin are opting to keep it in their wallets instead of selling it on an exchange.
Lastly, he suggested that the data no longer include consistent accumulators who have simply grown their holdings beyond the “shrimp” category. The result is a market increasingly powered by new large holders, corporate treasuries, and steadfast accumulators, making this cycle distinctly different from those in the past.
A Market in Search of Direction
The changing retail landscape comes even as the broader market is showing signs of fatigue. At the time of this writing, Bitcoin was priced at $107,133, down 3.2% over the last 24 hours and 6.8% in the past week.
It follows a difficult October, with CoinGecko data showing the asset fell more than 12% over the past month, and in the process, it helped break a long streak of positive October performances.
Other data support a cautious mood. A report from CryptoQuant noted that demand for BTC and ETH exposure has softened among U.S. investors, with Bitcoin ETFs seeing net outflows of more than 280 BTC and inflows into their Ethereum counterparts grinding to almost zero. Meanwhile, momentum indicators on Binance, such as the CVD, have pulled back from October highs, pointing to a possible loss of upward strength.
Traders are now watching key support levels; if selling pressure continues, the $97,000 to $98,000 zone is considered the next major test. And although the long-term foundation is still intact, the market appears to be taking a breather, with retail investors seemingly becoming more careful.