Bitcoin Stabilizes Near $95,500 as Retail Traders Remain Cautious While Institutional Demand Strengthens

Mixed Sentiment Following Recent Rally

Bitcoin stabilized near $95,500 following an 8% three-day rally that liquidated $465 million in short futures positions ^[2]. However, the cryptocurrency's pullback from $97,900 appears to have dampened investor enthusiasm, particularly among retail traders who have largely remained on the sidelines ^[2].

The current price level represents a 25% decline from Bitcoin's all-time high of $126,219 ^[2]. Global search interest for "crypto" registered at just 27 on a 0-to-100 scale according to Google Trends data, hovering near the 12-month low of 22 ^[2].

Retail Traders Show Limited Interest

Derivatives market indicators reveal muted retail participation in the recent price movement. Bitcoin perpetual futures funding rates—retail traders' preferred instrument—stood at 4% on Thursday, significantly below the 8% to 12% range typical under neutral market conditions ^[2].

Retail traders typically chase recent winners, and with silver prices climbing 28% over two weeks, Bitcoin has faced stiff competition from precious metals ^[2]. Concerns about socio-political risks and questions surrounding Federal Reserve independence have also contributed to retail skepticism ^[2].

Geopolitical tensions have added to the uncertainty, including threats of US retaliation against Iran over its response to anti-government protests. Iran controls major global oil tanker chokepoints and produces more than 3 million barrels of oil daily ^[2].

Institutional Demand Provides Support

Despite weak retail sentiment, institutional investment has continued to flow into Bitcoin. The spot Bitcoin ETF industry has surpassed $120 billion in assets under management ^[2]. Public companies following Michael Saylor's Strategy playbook have accumulated more than $105 billion in Bitcoin through corporate treasury purchases ^[2].

Hayes Predicts Liquidity-Driven Reversal

Former BitMEX CEO Arthur Hayes has offered a contrasting view, characterizing Bitcoin's 2025 performance as "utter dog shit" while arguing the cryptocurrency simply tracked declining dollar liquidity rationally ^[1]. Hayes noted that gold benefited from strategic central bank purchases and the Nasdaq from government-supported artificial intelligence narratives—factors Bitcoin lacked ^[1].

However, Hayes expects a "radical turnaround" in 2026 under the motto "Run it hot," predicting aggressive monetary expansion by the US government and Federal Reserve ^[1]. He anticipates new purchase programs, directed lending to strategic industries, and politically motivated mortgage rate reductions aimed at generating overheated growth ^[1].

According to Hayes, charts showing Bitcoin and dollar liquidity correlations already indicate a joint bottom formation ^[1]. He projects Bitcoin will recover its underperformance and rise significantly above $110,000 as the macroeconomic environment shifts from headwind to tailwind for the crypto sector ^[1].

Investment Strategy and Positioning

To capitalize on this anticipated scenario, Hayes is deploying multiple strategies beyond spot Bitcoin holdings. He is using MicroStrategy and Metaplanet stocks as leveraged proxies expected to outperform during a Bitcoin breakout ^[1]. Additionally, he is expanding positions in privacy coin Zcash, viewing recent developer departures as a contrarian opportunity ^[1].

Hayes remains bullish on gold as a reserve asset in a world moving away from US Treasury bonds but warns tech investors that "nationalization" of the AI sector could pressure long-term returns ^[1]. His 2025 prediction of $250,000 per Bitcoin proved significantly inaccurate ^[1].

Market Outlook

The divergence between retail caution and institutional accumulation presents an unusual market dynamic. While retail traders fear cryptocurrency could suffer most during economic downturns, institutional demand through ETFs and corporate treasuries has gained relevance throughout 2025 and may prove decisive in driving Bitcoin toward $100,000 ^[2].