Retail Investors Remain Cautious, Bears Yet to Exit: Bitcoin May Be Poised for the Next Wave of Steady Growth

According to CoinDesk reports

Despite Bitcoin reaching a historic high of nearly $112,000 last week, multiple data points indicate that retail investors remain cautious, and short positions have yet to fully dissipate. The crypto platform FRNT Financial believes that this phase of low leverage and low risk appetite “usually foreshadows a subsequent robust rally.”

Google Search Interest Remains Low

During the week of May 18, 2025, when Bitcoin surged to a historic high, the global search interest for the term “Bitcoin” on Google was only 29 points (out of 100), far below the levels seen during the previous bull market.

Source: Google

From January to May 2021, Bitcoin rose from $30,000 to nearly $65,000, while Google search interest consistently remained above 40 points, even peaking at 100 points, reflecting extremely bullish market sentiment at that time. In contrast, the search interest for this cycle has noticeably cooled, with the current high point being 64 points, which occurred in November 2024 when Bitcoin set another historic high following the election victory of Trump, who supports cryptocurrency, along with a brief surge in meme coins, leading to a significant rebound in retail sentiment.

Toronto-based crypto platform FRNT Financial stated: “In the early stages of this cycle, meme coins became a hub for high-risk trades driven by retail investors, with related trading peaking in January. However, since then, interest and trading activity in meme coins have nearly completely disappeared.” FRNT added that this indicates “the current risk appetite in cryptocurrency is lukewarm.”

A Significant Amount of Short Positions Remain

According to FRNT’s analysis, the current conservative atmosphere in the market is also reflected in the perpetual contract funding rates. When Bitcoin reached its historical high of about $42,000 in January 2021, the funding rate for perpetual contracts on the crypto options exchange Deribit was as high as 185%. Now, with Bitcoin nearing $112,000, the funding rate is only about 20%, indicating that while risk appetite has not completely vanished, it is far from the fervor seen in 2021.

Data Source: Deribit/FRNT, Image Source: CoinDesk

Another signal is that the number of short positions in the market remains high. According to a report from CoinDesk last week, despite Bitcoin breaking its historical high, the long-to-short ratio for Bitcoin is still at its lowest point since the crypto winter of September 2022, indicating that most traders remain cautious about this rally and are opting for short positions as a hedging strategy against the bullish trend.

Data Source: Coinalyze/TradingView, Image Source: CoinDesk

Given the current macro risks, it is not surprising that investors are choosing to be conservative.