Impact of Stagnant Retail Demand on Bitcoin’s Bullish Trend: An Analysis

Key Points

• Bitcoin’s recent price surge has been driven by institutional flows and long-term holding sentiment.
• Retail presence is fading as network activity drops and high-net-worth investors take control.

Bitcoin’s Institutional Driven Rally

Bitcoin’s 30-day percentage change in small investor activity has remained stagnant, despite a strong upward price trend. This divergence may indicate that institutions or “whales” are leading the rally. Without broader participation, the current momentum may lack the depth required for long-term expansion. Despite this, the price remains elevated above $100k.

On 28 May, spot exchange flows reflected strong outflows of $721.44 million against inflows of $616.51 million. Additionally, exchange reserves dropped by 0.96%, sitting at $266.49 billion at press time. This suggests that investors are withdrawing Bitcoin from exchanges, often a precursor to long-term holding or institutional custody.

Valuation Indicators and Retail Participation

However, valuation indicators seem to show early signs of cooling, despite Bitcoin’s strong price trajectory. The NVT Golden Cross and Puell Multiple, both fell, implying that price growth may be outpacing both network value and miner-based valuation anchors.

Despite the price hike, Bitcoin’s network growth has slowed. Over the past 7 days, new addresses declined, active addresses fell, and zero balance addresses dropped. These metrics reflect falling onboarding and transactional activity, indicating that the ongoing rally may not be organically supported by a broader user base.

Bitcoin’s transaction profile revealed significant imbalances too. Transactions below $100 fell sharply, while transactions above $10 million soared. This suggests a rally led by high-net-worth investors or institutional participants, while retail remains largely on the sidelines.

For Bitcoin to break decisively into a sustainable bull cycle, retail participants must return with confidence, liquidity, and volume. Without renewed retail interest, the momentum may weaken or become increasingly fragile.