Bitcoin Struggles as Retail Demand Drops 857,000 BTC

Bitcoin's price momentum is currently under pressure as overall net demand continues to shrink. Despite institutional entities remaining active buyers, the demand from retail investors has significantly decreased. Over the past year, U.S. spot ETFs have purchased 377,000 BTC, and MicroStrategy (MSTR) added another 371,000 BTC to its holdings. However, this institutional buying has not been enough to compensate for the 857,000 BTC drop in retail demand.

In January 2025 alone, combined ETF and MSTR buying accounted for 46% of total demand growth. However, the broader market participation tells a different story. Net demand has declined by 857,000 BTC, with non-institutional investors exiting positions. This drop in apparent demand has more than offset the gains made by ETFs and corporate buyers, resulting in Bitcoin struggling to break above its all-time highs, indicating limited support beyond institutional inflows.

At the time of writing, Bitcoin trades at $109,946.55, reflecting a modest 0.46% daily gain. The asset briefly dipped below $109,000 but rebounded to peak near $110,500 before stabilizing. Analysts see the move as short-term bullish momentum but warn that broader demand must recover to sustain long-term price growth.

Arthur Hayes, co-founder of BitMEX, warned that Bitcoin may face short-term downside pressure. In a recent blog post, Hayes wrote that market participants could lock in profits and wait for more clarity from the U.S. Federal Reserve. He expects Bitcoin to trend sideways or slightly lower until the Jackson Hole meeting in August. Hayes projected a potential dip to the $90,000–$95,000 range if U.S. dollar liquidity tightens due to Treasury General Account (TGA) replenishment. He also disclosed that Maelstrom, a fund with crypto exposure, has exited some illiquid altcoin positions and may scale back Bitcoin holdings as well.

Still, Hayes noted that this correction could provide the setup for a stronger rally later in the year. His outlook underscores the market’s sensitivity to macroeconomic shifts and liquidity trends. With institutional buying unable to offset retail weakness, Bitcoin’s near-term direction hinges on broader participation and Fed policy signals.