Bitcoin Faces Critical Test as Retail Demand Hits Resistance Levels
Bitcoin (BTC) is currently trading below $88,000, down from its all-time high of $109,000 earlier this year. The leading cryptocurrencies have faced a steady decline over the past month, down nearly 15% and showing limited signs of a rebound.
Although there are many investors involved in this bearish trend, a crypto analyst named Bilalhuseynov recently shared his view In the current state of Bitcoin, retail investor demand (RID) indicators are used.
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Bitcoin retail investors demand at crossroads
Bilalhuseynov’s analysis focuses on retail investor demand (RID). This indicator measures retail benefits and activities in Bitcoin and can often provide relevant Potential price changes.
According to analysts, demand from retail investors has faced resistance near the neutral zone recently, at about 0%. Back in mid-February, the RID metric tried to cross this threshold, but lacked it, causing Bitcoin to drop to its current $88,000 level.
But despite this setback, there are positive signs. The analyst noted that RID began to pick up again, a pattern reminiscent of June 2021, when Bitcoin saw a rapid recovery after a similar decline.
However, for the indicator to really send a positive signal, it needs to rise to the neutral zone of 0%, which indicates a potential transfer Market sentiment. Bilalhuseynov further elaborates on how RID indicators guide long-term analysis. He identified three key levels:
•Negative (-15%): Be careful of strong indicators of buying opportunities.
•Neutral (0%): Signs that the market may be preparing for movement in either direction.
• Positive (15%): Indicates that the price of Bitcoin has entered the “high-level area” and is often seen in bull markets.
The analyst gave an example, highlighting that in October 2024, Bitcoin reached its all-time highest level in the neutral zone above 0%.
Instead, the decline back to 0% at the end of 2024 marks an onset of the bearish phase. Currently, RID is at a critical moment, and the shift in retail demand may be Influence Bitcoin’s Trajectory In the next few months.
Short-term indicators point to potential rebound opportunities
Meanwhile, other analysts are identifying short-term buying opportunities based on different indicators. Yonsei Dent, another crypto analyst, Point to Expenditure Profit Rate (SOPR) for Bitcoin Short-term Holders (STH).
The indicator measures whether short-term holders sell out of profit or loss, and has recently dropped to levels that historically indicate excessive conditions.
According to Dent, applying the Bollinger band to STH-SOPR helps identify extreme deviations, and the current data shows a similar pattern Previous market bottom.
Dent noted that after each significant downside bias in STH-SOPR, short-term rebounds range from +8% to +42%, even in bear market conditions.
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This historical context shows that Bitcoin may be approaching a critical moment. If the model holds, short-term price recovery may occur, provide Opportunities for short-term traders.
Feature images created with DALL-E, TradingView’s chart
