Bitcoin’s demand among retail investors has reached its lowest point in five months, dropping to levels last seen in January, which led to a 75% surge over the following two months.
According to data shared by CryptoQuant author Axel Adler on June 10, the average monthly change in demand for Bitcoin among retail investors, those with up to $10,000 in transfer volume, has fallen to negative 17% over the last 30 days. Adler noted that a similar drop to -18% in January saw Bitcoin’s price increase from $40,000 to $70,000 after spot Bitcoin exchange-traded funds (ETFs) were approved in the United States, pushing Bitcoin to its all-time high of $73,679 in mid-March.
Adler pointed out that this particular group of investors reacts quickly to market changes. Last month, he used the same measure to show a 31% drop in demand over the 17 days prior to May 24, falling to negative 14.50%. He attributed this decline to increased interest in GameStop (GME) and Ether (ETH), possibly due to the initial approval of spot Ether ETFs.
Analysts have suggested that the shift in Bitcoin demand may be influenced by factors such as the U.S. Consumer Price Index (CPI), which tracks inflation. When the CPI decreases, it can make assets like Bitcoin more attractive to investors as traditional savings and term deposits offer less appealing returns with dropping interest rates.
Markus Thielen, head researcher at 10x Research, stated in May that the CPI must drop to 3.3% on June 12 for Bitcoin to reach new all-time highs, according to data from the Bureau of Labor Statistics (BLS).
Despite hopes for a quick rebound above $70,000 after dropping below it on June 8, Bitcoin has yet to do so. Future traders do not appear to be anticipating a recovery in the near term, with $2.14 billion in short positions at stake if it does bounce back.
The sudden decline in Bitcoin’s price wiped out $52.87 million worth of Bitcoin long positions in the past day. Open Interest (OI) remained above $35 billion, according to CoinGlass data.
This article does not offer investment advice. All investment and trading decisions involve risk, and readers are advised to conduct their own research before making any decisions.