Bitcoin Demand Among Retail Investors Hits Five-Month Low, Potential for Rebound Remains

• The demand among individual crypto investors has recently dipped to levels last seen in January, representing a significant decline over the past five months.
• This decline followed a substantial 75% increase in the subsequent two months after the last similar drop in January.
• CryptoQuant analyst Axel Adler shared data on June 10 on X, highlighting that the average monthly change in Bitcoin demand among individual investors (with transfer volumes up to $10,000) dropped by 17% over the last 30 days.

Explore the latest trends and significant shifts in individual crypto investment demand, shedding light on what might come next.

The Rising Importance of Macro Data on Cryptocurrencies

In the past month, Adler noted that the same measure showed a 31% decline in demand by May 24, with the metric falling to -14.50%. Analysts have attributed these fluctuations in Bitcoin demand to various factors, including the US Consumer Price Index (CPI), which tracks inflation.

When CPI decreases, traditional savings and fixed deposits become less attractive due to lower interest rates, potentially making riskier assets like Bitcoin more appealing to investors.

The Role of CPI in Bitcoin’s Market Movements

10x Research’s lead researcher Markus Thielen mentioned to Cointelegraph in May that, for Bitcoin to reach all-time highs, CPI would need to drop to 3.3% by June 12, the date when the Bureau of Labor Statistics (BLS) was scheduled to release its data.

On June 11, Bitcoin fell below its November 2021 all-time high of $69,000, a key level closely monitored by investors.

Short-term Market Reactions and Future Outlook

The sudden drop led to the liquidation of $52.87 million worth of Bitcoin long positions in a single day, according to CoinGlass data. Despite hopes for a quick recovery past $70,000, Bitcoin has yet to achieve this milestone since falling below the mark on June 8. Open Interest (OI) remains above the closely watched $35 billion level.

Regardless of the CPI results expected on June 12, future traders do not seem optimistic about a near-term recovery. A potential rally could put $2.14 billion worth of short positions at risk.

Conclusion

While immediate recovery expectations remain muted among traders, the significant shifts in Bitcoin demand and its ties to macroeconomic indicators like CPI are crucial to monitor. As always, individual investors should conduct thorough research and remain cautious, considering the inherent risks in crypto trading.

This article does not constitute investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their research when making a decision.