Bitcoin speculative appetite declines as investors seek safety
Investor sentiment in the cryptocurrency market is shifting dramatically, marked by a diminished appetite for speculative trading in favor of more secure digital assets. This change in mood comes on the heels of several high-profile memecoin scams and overarching macroeconomic volatility, prompting many investors to reassess their strategies.
Recent data from Glassnode highlights a significant drop in Bitcoin’s “hot supply” metric—an indicator measuring the volume of Bitcoin held for a week or less—which has plummeted over 50% from 5.9% at the end of November 2024 to just 2.3% as of March 20, indicating that fewer new coins are entering circulation. Ryan Lee, chief analyst at Bitget Research, attributes this decline to a growing inclination among investors toward safer positions during uncertain market conditions. Lee notes that “during uncertain times, investors are not only seeking security but are also focused on rational decision-making. In many instances, that rational choice is represented by Bitcoin.”
A parallel metric, the stablecoin supply ratio (SSR), also signals investor hesitance. The SSR, which compares the supply of Bitcoin to that of stablecoins, recently fell to an over four-month low of 8—levels not seen since early November 2024, just before a significant price rally that saw Bitcoin peak at $109,000. Values below 10 are interpreted as indicative of low stablecoin buying power relative to Bitcoin’s overall market cap.
The cautious sentiment among crypto investors aligns with trends seen in traditional markets. Enmanuel Cardozo, a market analyst at Brickken, asserts that fluctuations in the U.S. stock market often influence risk appetite across asset classes, including cryptocurrencies. He emphasizes that while the macroeconomic landscape remains uncertain, these fluctuations offer important insights into where actual value lies as the market matures.
Despite the current atmosphere of caution, Bitcoin continues to demonstrate impressive resilience, outperforming many major global assets since the election of U.S. President Donald Trump. This performance includes gains against equities, U.S. treasuries, real estate, and even precious metals, suggesting that Bitcoin players still recognize its potential long-term value.
The cooling of investor speculation is underscored by technical analyst Kyledoops, who remarked on social media about the broad shift away from speculative trading. “Speculative appetite is fading, and the market is cooling off,” he stated, highlighting the implications of this shift—such as reduced liquidity and lower participation rates.
Looking ahead, many analysts remain bullish on Bitcoin’s price trajectory for the remainder of 2025, with predictions suggesting targets ranging from $160,000 to upwards of $180,000. This optimism persists despite changes in investor behavior, indicating a complex interplay between caution and speculative growth that characterizes the current crypto landscape.
