Bitcoin Retail Investor Demand Grows as Sell-Side Risk Drops — What’s Next for BTC Price?

Bitcoin retail investor demand recently shifted back towards the neutral zone around 0%. Historically, changes in this metric have had a correlated impact on BTC’s price trajectory.

Notably, the current recovery from a steep -21% to 0% suggests a possible rekindling of retail interest. Reminiscent of past patterns where retail demand recovery often preceded price increases.

Similar recoveries in demand, such as the one in July 2024 from -19%, were followed by a gradual uptick in Bitcoin price over a period of three months.

If this pattern holds, there could be a delayed response in price adjustment, potentially signaling a bullish outlook in the short-term future.

On the other hand, the substantial volatility in retail investor sentiment also presented a risk of rapid sentiment reversal, which could lead to sudden price declines if negative trends re-emerge or external market forces exert downward pressure.

Bitcoin Sell-Side Risk Ratio

Further look at the Bitcoin Sell-Side Risk Ratio showed notable decrease to historically low levels, suggesting a local bottom and signals an accumulation phase with reduced selling pressure.

This fall to values around 0.08% aligns with past patterns where such dips precede periods of market stabilization or bullish reversals, indicating a potentially favorable entry point for investors.

Historically, every significant drop in this ratio, such as those in November 2023 and September 2024, often followed by a gradual increase in Bitcoin’s price, as seen in subsequent months.

For instance, the reduction in November 2023 led to a gradual price recovery in the following months, reflecting decreased sell-side pressure and increased buying activity.

Conversely, while the low sell-side risk ratio suggests a bullish outlook, the opposite scenario could unfold. This could lead to sustained low prices or further declines if new negative drivers emerge, despite the current low risk of sell-side pressure.

Where is BTC Price Headed?

For price action, BTC price is in a consolidation phase within a well-defined trading range, largely bounded by critical price levels that serve as key psychological and technical pivots.

The upper boundary of the range is currently established around $99,000, where previous resistances have halted upward movements.

The lower boundary, providing substantial support, lies near $95,000, a level where significant buying pressure has historically materialized.

Currently trading at $95,700, Bitcoin is near the lower boundary of its recent range, suggesting a pivotal zone where traders might anticipate potential buying opportunities.

If Bitcoin holds the support at $95,000, a rebound towards the upper boundary of $99,000 is likely. A breakout above this level could set the stage for a move towards $104,000, following the established pattern of upward breaks from this trading band.

Conversely, a breakdown below $95,000 could trigger a sell-off, targeting lower supports at $90,000 and $86,000, as these levels align with historical pullbacks and psychological thresholds.

Each time Bitcoin has tested the lower end of its current range, a recovery ensued, often reaching or surpassing the upper end.

However, repeated tests of support without a significant breakout above the range could weaken buyer momentum, potentially leading to a bearish downturn.