Retail Bitcoin Demand Falls Even as Prices Hit Record Highs

• Retail Bitcoin demand drops 2.45% despite prices nearing $115K highs.
• On-chain data shows no retail euphoria; market driven by large holders.
• Flat retail activity hints at cautious sentiment and possible ETF-based exposure.

Retail investor participation in Bitcoin has declined over the past month, despite the cryptocurrency’s price reaching historic levels. Data from on-chain analytics firm CryptoQuant shows that transaction activity involving smaller amounts, typically under $10,000, has slowed. This trend signals a possible shift in market dynamics as institutional actors may be playing a larger role in the ongoing price rally.

CryptoQuant’s recent chart tracks the 30-day percentage change in Bitcoin demand across transactions under $10,000, a metric commonly associated with retail investors. During the second half of 2024, particularly from July to November, this indicator showed strong growth. In November, the metric surpassed 30%, coinciding with Bitcoin’s climb from approximately $55,000 to over $95,000.

However, starting in January 2025, retail demand began to fall sharply. By that point, the metric had dipped below -15%, despite Bitcoin maintaining a high valuation above $90,000. Since February, the change in retail demand has hovered near 0%, suggesting minimal new buying activity from smaller investors even as the price approached and briefly exceeded $115,000.

Structural Demand Shift Observed

Over the past 30 days, on-chain retail demand has decreased by about 2.45%. This pattern also shows that small investors are becoming less optimistic. Analysts believe this trend does not mean retail investors are ignoring Bitcoin entirely, as some could be buying shares in exchange-traded funds (ETFs) or BTC-holding companies. Nonetheless, such indirect exposure does not show up in standard on-chain metrics.

The divergence between on-chain activity and price performance implies that the current market momentum is likely being driven by other sources, most notably, institutional investors or large holders already in the market. If the retail market is not fully engaged, it may avoid the intense speculation that could lead to a market correction.

The numbers from CryptoQuant suggest that the market price is high, but buying interest among investors is normal. Maintaining the trend toward gains requires favorable economic news and firm investor demand.