Bitcoin is maneuvering through a crucial crossroads after hitting a new all-time peak of $124,500 last week, only to swiftly pull back. Currently, the price is seeking support, with oscillations heightening and traders discussing whether this signals the onset of a more extensive correction or just a healthy consolidation period before a resumption. Some experts remain hopeful, perceiving this pullback as a natural adjustment in an overheated market, while others contend that momentum is waning as bearish indicators surface.
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Adding significance to the conversation, CryptoQuant analyst Axel Adler underscored an important trend in retail involvement. The proportion of retail transfers in the $0–$10K range within Bitcoin’s total USD turnover has been steadily decreasing throughout this cycle. From a peak of 2.7%, this share has now dwindled to merely 0.6%.
Historically, such declines in retail involvement have coincided with the latter stages of upward trends. This situation raises concerns about whether the present phase signals a reduction of retail enthusiasm at a crucial moment for Bitcoin, as institutional investors and long-term holders dominate market dynamics.
Bitcoin Retail Activity Declines as Market Cools
According to CryptoQuant analyst Axel Adler, although the proportion of retail activity within Bitcoin’s network has significantly fallen, in absolute terms, it still holds considerable value. Retail transfers in the $0–$10K range account for over $400 million daily, but this constitutes only 0.6% of the total USD turnover across the network. This contracting share underscores a decisive trend: while smaller investors are still participating, their relative influence on overall market movements is dwindling.
Adler observes that this reduction in retail demand was also noted in fall 2021, at the zenith of the prior cycle. At that point, the retail share plummeted to a record low of just 0.19%, coinciding with overheated market conditions and signaling the concluding stages of that upward trend. The current downturn in retail participation echoes that trajectory, implying that the market could be nearing a similar late-cycle scenario.
This situation is significant because retail investors have conventionally been a robust catalyst for momentum during bullish markets. With their diminished influence, institutional inflows, long-term holders, and treasury strategies now acquire an even greater role in directing market trends. The forthcoming weeks will be pivotal as altcoins, led by Ethereum, exhibit renewed vigor. ETH is nearing its 2021 all-time high, and numerous analysts believe that its performance could influence the broader crypto market’s subsequent direction.
If retail demand continues to decline while institutional accumulation rises, Bitcoin may further consolidate, while capital rotates towards altcoins gaining traction.
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Bulls Defend Key Demand Level
The 8-hour chart depicts Bitcoin (BTC) under strain as it trades near $113,400, struggling to maintain its position above its 200-day moving average (red line), currently positioned around $113,416. This zone has become a vital support area after BTC failed to sustain momentum above the $123,217 resistance, which has served as a clear rejection point multiple times during this cycle.
Shorter-term moving averages emphasize the bearish momentum. The 50-day SMA (blue) at $117,017 and the 100-day SMA (green) at $117,087 are both trending above the current price, causing overhead resistance. The breakdown below these averages confirms a weakening trend, with BTC struggling to regain lost territory. Price action also illustrates a series of lower highs and lower lows since the rejection at the $124K zone, reinforcing bearish short-term sentiment.
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For bulls, reclaiming the 100-day SMA near $117K would be crucial to reversing momentum and attempting to push toward the $120K–$123K range. Failing to maintain the 200-day SMA risks accelerating downside, potentially paving the way toward $110K, a significant psychological threshold.
Featured image from Dall-E, chart from TradingView
