Bitcoin (BTC) Price Rebounds as Retail Investor Demand Slowly Recovers

Bitcoin's price performance remains under pressure, with the asset experiencing a drop of 2.3% over the past week. This decline pushes BTC's value even further from its January all-time high of over $109,000.

Bitcoin’s price continues to face challenges, with a 2.3% drop over the past week, further distancing the asset from its January all-time high of over $109,000. In the face of bearish momentum, analysts are monitoring signs of renewed interest from retail investors, a crucial market segment that could influence Bitcoin’s near-term direction.

A recent analysis by CryptoQuant analyst Darkfost highlights a promising shift in Bitcoin’s retail demand metrics. The 30-day demand change has climbed back into the neutral zone around 0%, recovering from a deeply negative -21% observed late last year.

According to Darkfost’s insights, this marks the first time since 2021 that retail demand has shown such a significant turnaround. Historically, periods of recovering retail demand have tended to precede eventual price rebounds.

For instance, in July 2024, retail demand reached a similar low point before beginning to recover. Though it took about three months for Bitcoin’s price to respond positively, the subsequent upward move demonstrated the impact of growing retail interest.

Bitcoin retail Investor demand is brewing

Notably, past instances of recovering retail demand have often coincided with upward price movements in the short-term.

For example, as highlighted by @Darkfost_Coc, periods of recovering 30-day demand have historically been followed by positive returns.

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— CryptoQuant.com (@cryptoquant_com) February 24, 2025

Darkfost noted that if this trend holds true this time, the current recovery in retail demand could pave the way for future price gains—although such shifts may take time to manifest.

Network Activity and Investor Sentiment Weakening

While the signs of retail demand are positive, broader network activity and investor sentiment paint a more cautious picture.

Darkfost's analysis, in a separate post, reveals a declining trend in the number of active Bitcoin wallets and transactions used for deposits and withdrawals. Accumulation of Bitcoin by spot ETFs has also slowed, with minor outflows indicating a more hesitant investor base.

Furthermore, the number of unspent transaction outputs (UTXOs) is decreasing at a rate that resembles previous market cycle peaks. While this observation alone does not confirm a market top, it does raise questions about the underlying strength of current market participants.

Investor sentiment has also been influenced by broader macroeconomic and geopolitical factors. Darkfost notes that while initial bullish sentiment was driven by optimism regarding Trump’s election and the potential for favorable US crypto regulations, no substantial policy changes or legislative actions have yet materialized.

Meanwhile, global trade tensions and risk-averse market behavior continue to dampen enthusiasm. With earlier bullish narratives already priced into Bitcoin’s performance, the market will likely require new catalysts or improving conditions to regain upward momentum.

Featured image created with DALL-E, Chart from TradingView