Fetch.AI price rally likely with retail investor accumulation of FET tokens

• Retail investors are buying Fetch.AI tokens while whales distribute their holdings.
• FET supply on exchanges has hit its lowest level in six months, supporting a bullish thesis for the AI token.
• Whale transaction activity remains relatively high, alongside FET price rally in the past two weeks. 

Fetch.AI (FET) price fell on Tuesday, following the previous week’s 3% gains. Despite the recent price decline, on-chain data suggest that the Artificial Intelligence (AI) token’s price could be set for further upside moves. According to data provided by Santiment – a crypto intelligence tracker – retail traders are actively accumulating FET, large-wallet investors have been distributing their token’s holdings, and supply on exchanges is declining. 

Also read: Ripple transaction activity hits three-month peak, XRP price likely to extend gains

FET price gains could extend 

FET price yielded 47% gains for holders in the past month. In a broadly bullish crypto market and with the AI narrative gathering steam, retail traders have been buying the token consistently since mid-November, according to Santiment data. 

Retail traders holding between 1,000 and 1,000,000 FET coins have consistently added to their portfolio since November 17. This behavior  implies that the gains in the past two weeks were driven by three cohorts of market participants: those investors holding between 1,000 and 10,000 FET, 10,000 and 100,000 FET and 100,000 to 1 million FET tokens.

Meanwhile, whales holding between 1 million and 10 million FET tokens have distributed their holdings. Whales shed their holdings, and these FET tokens were then absorbed by holders in retail segments, or those who own between 1,000 and 1 million tokens. 

Retail investors accumulate FET. Source: Santiment

Alongside retail accumulation, the token’s supply on exchanges is on a decline. There are net outflows from exchanges and there is a clear divergence between FET price and the asset’s exchange supply, as seen in the chart below. 

On November 5, FET supply on exchanges (as a percentage of the asset’s total supply) started declining, alongside an increase in the asset’s price. This is a bullish indicator as dwindling supply is the equivalent of declining selling pressure. 

FET supply on exchanges and price. Source: Santiment 

Whale transactions valued at $100,000 and higher have increased since November 22. However, these moves don't seem to be directly related to profit-taking, according to the Network Realized Profit and Loss (NPL) metric. Typically, profit-taking by large wallet investors could increase the selling pressure on the asset and drive its price lower. 

In the case of FET, the increase in whale transactions came together with smaller spikes in profit-taking, as noted by the Network Realized Profit/ Loss (NPL) metric in the chart below.

Whale transaction count (>$100,000) and NPL Source: Santiment

At the time of writing, FET price is $0.5284, down 2.42% on the day. FET weekly gains are nearly 3% for holders on Binance.

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