Bitcoin is exhibiting signs of renewed fragility as it attempts to regain the $110,000 level, a task that has proven challenging for bulls and raises the possibility of further downside risk. The selling pressure escalating across the market has driven BTC to explore lower demand zones while traders reevaluate their positions following the recent bout of volatility. While the macroeconomic environment remains largely positive, short-term sentiment has shifted toward caution as liquidity tightens and speculative activities diminish.
A pivotal factor influencing this cycle is the notable decline in retail participation. Top analyst Darkfost reports a sharp drop in activity among small holders, which is measured by inflows to Binance. Since the initial phases of 2023, just after the bear market ended, the 90-day moving average of shrimp inflows has plummeted from approximately 552 BTC per day to a mere 92 BTC today. This staggering five-fold reduction marks one of the sharpest declines in retail engagement observed during Bitcoin’s recovery phases.
This fundamental shift serves to highlight how distinct this cycle is compared to previous ones. With retail investors largely on the sidelines, Bitcoin’s movement is now primarily influenced by institutional flows, large holders, and long-term accumulation strategies. For bullish proponents of Bitcoin, the path forward hinges on the arrival of new liquidity or the potential for current selling pressures to drive BTC deeper into support levels before a renewed uptrend can commence.
Spot ETFs Alter Market Dynamics as Retail Fades
The downturn in retail engagement has intensified following the launch of US spot Bitcoin ETFs in January 2024. Prior to the ETFs’ introduction, small holders were transferring roughly 450 BTC daily to Binance. Since the ETFs went live, that number has plummeted to just 92 BTC per day, with a continued downward trend observed. This evolution signifies a structural change in how retail investors are interacting with Bitcoin, impacting where liquidity enters the market.
Darkfost identifies three core drivers behind this remarkable decline. Firstly, a segment of the retail investor base has shifted towards ETFs, favoring the convenience and perceived security of regulated financial products over self-custody options and traditional exchange activities. This trend naturally leads to a reduction in on-chain inflows to platforms like Binance. Secondly, the remaining retail investors have altered their strategies to focus on long-term holding rather than active trading, indicating a transition to a more disciplined and stronger cohort of small holders. Lastly, many early retail accumulators are moving beyond the shrimp category, now holding more than 0.1 BTC, thus no longer being part of the smaller deposit statistics.
These developments showcase a substantial transformation in Bitcoin’s market structure. Currently, the landscape is dominated not by speculative retail activity but by institutional inflows, emerging whale players, corporate treasury allocations, and long-term accumulation patterns. This shift has resulted in Bitcoin’s supply tightening at the margins even as the price experiences consolidation—creating a gradual yet potent supply-demand dynamic unlike previous cycles. The current market support for Bitcoin is more structurally resilient, albeit producing a steadier approach that contrasts sharply with traditional retail-driven bull markets.
Bitcoin Remains Below Critical Moving Averages
As of now, Bitcoin (BTC) trades near $107,250, hovering above a vital support zone after facing repeated rejections from resistance levels. The daily chart illustrates BTC struggling to build momentum, with numerous efforts to reclaim the $110,000 to $112,000 range faltering as sellers consistently emerge near short-term resistance areas and moving average clusters. This critical zone symbolizes significant liquidity and acceptance; a conclusive break above it is essential for catalyzing further upward momentum.
Currently, BTC remains below its 50-day and 100-day moving averages—a bearish short-term indication that suggests ongoing market uncertainty. The 200-day moving average acts as a critical dynamic support level slightly under the current price; a breach of this zone could signal a potential retest of the $104,000 to $105,000 region, where considerable demand previously emerged during October’s sell-off.
On the upside, a decisive break above $112,000 followed by a reclaim of the $117,500 Point of Control is necessary to restore bullish momentum and revive prospects for a forthcoming price surge. At this juncture, Bitcoin remains entwined in a cautious trading pattern, with sellers firmly defending overhead resistance while buyers react only at designated support levels. An atmosphere of suppressed volatility prevails as the market awaits fresh catalysts and liquidity inflows.
