Bitcoin Retail Demand Levels Return to Neutral Zone—What Next?

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.

Amid the bearish momentum, analysts are observing signs of renewed interest from retail investors—a critical market segment that could shape Bitcoin’s near-term direction.

Bitcoin Retail Demand Slowly Recovers

A new analysis by CryptoQuant analyst Darkfost has highlighted a promising shift in Bitcoin’s retail demand metrics. Specifically, the 30-day demand change has climbed back into the neutral zone around 0%, recovering from a highly negative -21% seen late last year.

According to the insight shared by Darkfost, this is the first time since 2021 that retail demand has shown such a notable turnaround. Historically, periods of recovering retail demand have been linked to eventual price rebounds.

For example, in July 2024, retail demand reached a similar low point before beginning to recover. Although it took roughly three months for Bitcoin’s price to respond positively, the subsequent upward movement 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.” – By @Darkfost_Coc

Full post https://t.co/lvhC8JnvBD pic.twitter.com/YdBr6F78W7

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

Darkfost noted that if this trend holds true this time, the current recovery in retail demand could lay the groundwork for future price gains—though such changes may take time to materialize.

Network Activity and Investor Sentiment on the Decline

Despite the positive signs from retail demand, overall network activity and investor sentiment tell a more cautious story. Darkfost in a separate post revealed a downward trend in the number of active Bitcoin wallets and transactions used for deposits and withdrawals.

The accumulation of Bitcoin by spot ETFs has also slowed, with minor outflows suggesting a more hesitant investor base. Additionally, the number of unspent transaction outputs (UTXOs) is decreasing at a pace reminiscent of previous market corrections.

Although this alone does not confirm a market cycle peak, it does raise questions about the underlying strength of current market participants.

Investor sentiment has also been weighed down by broader macroeconomic and geopolitical factors. Darkfost highlighted that while initial bullish sentiment was buoyed by optimism surrounding Trump’s election and the possibility of favorable US crypto regulations, no substantial policy changes or legislative actions have yet emerged.

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

Featured image created with DALL-E, Chart from TradingView