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Although Bitcoin is moving toward a major price resurgence as bullish momentum returns to the crypto market, recent data from on-chain analytics platform Cryptoquant shows that retail investor participation is fading rapidly.
While this suggests that the ongoing price stabilization and broader crypto market recovery are masking a growing weakness beneath the surface, market analysts are worried about what the asset’s next price action will be.
Bitcoin small holders relent
Data provided by the analyst has revealed a sustained decline in retail demand. This represents the number of Bitcoin investors holding between $0 and $10,000 worth of the asset.
The decrease in retail demand over the past month has remained largely negative, suggesting that smaller investors are stepping away even as Bitcoin has flipped positive in its trading price.
While strong and sustained Bitcoin price rallies have often relied on renewed retail participation to support spot demand, the weak demand from retailers may mean otherwise for Bitcoin this time.
While Bitcoin’s price action partially depends on bullish investor sentiments coupled with retail participations, the collapsing retail demand suggests that the market has remained fragile regardless of the ongoing resurgence.
Moreover, Bitcoin ETFs have seen slow demand from investors lately, suggesting that institutions are not doing enough to offset the weakness seen among retailers.
Bitcoin reclaims $90,000
After multiple days of trading around the $87,000-$88,000 level, Bitcoin is finally back to green territory and has reclaimed the crucial $90,000.
While the asset has surged by over 3% over the last day, trading around $90,203 as of press time, the sustainability of this price recovery remains in doubt as the foundation beneath the rally remains very weak.
Despite periodic price rebounds, it appears that Bitcoin’s price love still lacks broad-based conviction. As such, Bitcoin’s current recovery is at risk of breaking down if there is no notable return of retail investors and improvement in on-chain demand.