Bitcoin (BTC) is trading uncomfortably close to the $90,000 mark, as macroeconomic caution, declining liquidity, and shifting market dynamics are putting pressure on its price action.
What was once a retail-driven ecosystem is now increasingly shaped by institutional flows. U.S. spot Bitcoin ETFs have attracted considerable assets, while on-chain activity is trending downward. The shift results in a market that continues to move, albeit with participation patterns vastly different from those seen in earlier cycles.
Bitcoin ETF Flows Rise as Retail Activity Falls
Since the launch of U.S. spot Bitcoin ETFs in early 2024, the network has seen a steady decline in active on-chain addresses. Analysts attribute this partially to the “convenience trade” phenomenon, where retail investors prefer exposure through traditional brokerage accounts instead of managing their own Bitcoin wallets.
Notably, BlackRock’s IBIT and similar products are emerging as dominant players in capturing BTC demand, even as the blockchain itself reflects a decline in grassroots participation.
Industry experts argue that this shift fundamentally alters how value circulates within the Bitcoin economy, as ETF issuers now capture a larger share of revenue, overshadowing miners and traditional network users.
SwanDesk CEO Jacob King highlights this transformation as a structural pivot towards off-chain monetization, indicating that Bitcoin is increasingly viewed as a financial instrument rather than a traditional peer-to-peer asset.
BTC Price Pressure Intensifies Around Macro Events
Recent price behavior in Bitcoin illustrates both macroeconomic uncertainty and intraday volatility. btc has struggled to maintain levels above $90,000, despite significant market developments like Strategy’s (formerly MicroStrategy) purchase of over 10,600 BTC.
Traders remain skittish ahead of the Federal Reserve’s upcoming policy decision, with high expectations for a quarter-point rate cut. However, the market’s reluctance is palpable: upward movements towards $92,000 consistently encounter resistance, and liquidity issues persist across both spot and derivatives markets.
As a result, analysts caution that Bitcoin must remain above a crucial support level near $88,000 to prevent a more significant downturn.
Institutional Trading Dynamics Shape Market Movements
A growing number of analysts suggest that observable sell-offs during the U.S. market open might indicate coordinated trading strategies rather than organic market reactions.
Market observers have pointed to high-frequency trading firms, such as Jane Street, which maintain large ETF positions as potential contributors to these recurring sell-off patterns. While this theory remains unproven, the frequency of price drops has certainly added to trader frustration.
Meanwhile, miners are confronting their own set of challenges. The Hashprice has plummeted to near record lows, prompting operators to consider pivoting towards AI infrastructure as mining profitability continues to diminish.
With ETFs absorbing demand, significant macro signals influencing sentiment, and miners restructuring their operations, Bitcoin finds itself at a critical juncture. While institutional capital provides a layer of support, the absence of retail participation that once defined its cycles raises questions about the future trajectory of the world’s leading cryptocurrency.
Cover image from ChatGPT, BTCUSD chart from Tradingview
