Cryptocurrency analysis: CryptoQuant examines the driving factors behind Bitcoin's recent upward trend in prices
In the current market landscape, Bitcoin is consolidating below the $120,000 mark, a trend that has been largely influenced by the actions of institutional investors.
Currently, retail accumulation of Bitcoin has turned significantly negative, with retail investors selling their holdings since early 2023. This contrasts starkly with the behaviour of large investors, who have been aggressively accumulating Bitcoin since early 2024.
The absence of retail investors suggests that Bitcoin still has room for growth, as a rise in retail interest in Bitcoin usually follows an increase in its price. However, this is not currently the case, with data from Google Trends indicating a muted interest in Bitcoin searches, although not at the lowest in five years.
CryptoQuant suggests that there is no retail fear of missing out (FOMO) or social media overflowing currently, further indicating a lack of retail participation.
This cycle of Bitcoin's rally is different from previous ones as retail investors are selling, while large players are buying. This trend was also observed in late 2020 and early 2021, and it has continued in November 2024.
The analytics firm states that this cycle looks nothing like the madness of 2021, suggesting a more mature and less retail-fueled market phase.
The reasons for retail investors' absence are multifaceted. Many retail investors remain cautious after the brutal crypto winter following the 2021 bull run, marked by high-profile bankruptcies and scams. Surveys show that despite increased ownership, 64% of U.S. investors still view cryptocurrency as "very risky," which dampens retail enthusiasm to re-enter aggressively.
Additionally, around 1% of crypto addresses control over 87% of circulating Bitcoin as of 2025, illustrating extreme wealth concentration. Institutional players, corporations, funds, governments, and whales now heavily dominate the market. Retail investors still hold about 67% of total Bitcoin supply, but liquidity constraints and rising prices limit their ability or willingness to buy more.
Finally, growing institutional presence and sophistication are intensifying competition for limited Bitcoin supply, increasing prices and creating structural barriers for retail inflows.
As a result, price rallies tend to be driven more by institutional buying and longer-term holders rather than a broad retail "fear of missing out." This results in potentially more sustainable but less exuberant bull runs, with higher price levels and lower volatility due to fewer retail driven spikes. However, it also means market moves can be more sensitive to large investors' decisions, which can intensify corrections or stall momentum if big holders reduce exposure.
In conclusion, the current bull run is being shaped by retail investors' ongoing risk perceptions and market structure shifts toward concentrated institutional dominance. Quiet and smart money are currently dominating the Bitcoin market, with most people watching from the sidelines.
- The ongoing sell-off by retail investors, as seen since early 2023, is contrasting the aggressive accumulation by large investors, indicating a shift in the finance landscape towards institutional dominance in the business of Bitcoin trading.
- The increasing concentration of Bitcoin wealth in the hands of institutional players, corporations, funds, governments, and whales, coupled with the growing risk perceptions among retail investors, is leading to a technology-driven market phase that is less reliant on retail FOMO for price rallies.
- With institutional investors, longer-term holders, and a limited number of crypto addresses controlling a majority of the circulating Bitcoin supply, the latest bull run is not characterized by the retail 'fear of missing out' that fueled previous runs, resulting in potentially more sustainable but less exuberant price movements with higher levels and lower volatility.
