Why Individual Investors Are Driving the Crypto Market’s Latest Downturn

Retail traders panic as crypto markets slide—again.

When the herd stampedes, even Bitcoin trembles. December's selloff shows Main Street investors flipping from greedy to fearful faster than a DeFi rug pull.

The irony? These same traders who FOMO'd into NFTs at ATHs are now dumping bags at a loss. Classic buy-high, sell-low behavior—Wall Street sharks must be loving the liquidity.

Volatility isn't a bug in crypto, it's the main feature. And until retail learns to HODL through the dips, they'll keep feeding the whales.

The recent weeks have been challenging for investors, particularly with the short-term effects of the Federal Reserve meeting not favoring cryptocurrencies. While the reasons for the decline have been extensively discussed in the past 12 hours, it is essential to focus on the expectations of popular analysts for the next phase. Among the concerns is the current state of individual investors and their influence on Bitcoin’s price trajectory.

Individual Investors Selling

The significant downturn over the past two months can largely be attributed to a synchrony of veteran investors offloading BTC, which led individuals to panic and follow suit. Many investors have grown tired of the shallow moves and the painful cycle of rises, inevitably ending in declines. Those who have endured these trying times understand that easy money in cryptocurrencies is a myth; newcomers who entered during the bullish phases are now facing a harsh reality check.

Analyst JA_Maartun has shared a chart indicating that individual investors are still selling, highlighting how every technical peak ends in failure.

“Are individual investors on the Coinbase exchange giving up? Last week, medium-sized orders ($10,000-1 million) remained steady at $381 million… Meanwhile, the FLOW of individual investors (below $10,000) has sharply declined, and the cumulative volume difference has now dropped to -$58 million. Whales are silent, but small investors are selling.”

Three Crucial Cryptocurrency Analyses

Among the other charts, two are related to Bitcoin$90,359, and one pertains to the ETHBTC pair. Most altcoins have been severely damaged except for a strong few. Analyst Michael Poppe, examining the ETHBTC chart, aimed to understand what could be expected for altcoins in general.

“Higher timeframe support was maintained, showing strength above the 20-day moving average with a clear breakout. A normal correction is ongoing, and it continues to hold above this significant indicator. Before resuming the upward trend, I expect it to pause for a while.”

Despite Poppe’s optimism, the outlook for altcoins is less than stellar, and as the weekend approaches, a positive picture fails to emerge.

Sharing the above chart, Analyst Mark Cullen points to $87,700. He emphasizes that the pink box marked in the chart needs to be maintained, and holding support is crucial. Following the recent “sell the news” dip, Cullen hopes for a rebound.

Lastly, Analyst Jelle suggests that BTC, within the rising wedge, will MOVE toward resistance levels. However, the 2025 opening level of $94,000 must be protected. The tedious movements in cryptocurrency seem destined to continue unless either $88,000 or $94,000 is permanently broken.