Bitcoin Struggles as Institutional Demand Remains Weak

Bitcoin's recent price swings indicate a lack of strong institutional participation, keeping the market in a consolidation phase.

A report from Bitfinex highlights Bitcoin’s sharp decline from its record high of $109,590 on January 20 to a low of $77,041 last week—a 29.7% drop, making it the second-deepest correction in the current bull cycle.

While bull markets historically see pullbacks of around 30% before resuming upward momentum, this cycle has had milder corrections due to institutional adoption and ETF demand. However, short-term holders are now experiencing losses, increasing the risk of further selling.

One key concern is the slowdown in new capital inflows. A decline in fresh investment typically signals weaker demand, making it harder for Bitcoin to sustain critical support levels. If this trend continues, BTC could remain stuck in consolidation or even face further declines as investors offload their holdings.

Analysts believe that Bitcoin’s next move depends on whether institutional investors and long-term holders step in to absorb selling pressure. If larger players begin accumulating at current levels, it could stabilize prices and shift sentiment toward a more bullish outlook.