Retail Demand Drops as Bitcoin Faces Resistance Near $110K

• Institutional buying can’t compensate for the 857,000 BTC retail demand drop.
• Arthur Hayes sees a potential dip to $90K if liquidity tightens.

Bitcoin’s price momentum is under pressure as overall net demand continues to shrink. CryptoQuant data shows that institutional entities remain active buyers of Bitcoin. Over the past year, U.S. spot ETFs have purchased 377,000 BTC. MicroStrategy (MSTR) added another 371,000 BTC to its holdings.

In January 2025 alone, combined ETF and MSTR buying accounted for 46% of total demand growth. However, 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. As a result, Bitcoin has struggled 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 Warns of Volatility, Eyes Fed Liquidity Signals

Arthur Hayes, co-founder of BitMEX, warned that Bitcoin may face short-term downside pressure. In a recent blog post titled “Quid Pro Stablecoin,” 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.