The average monthly change in Bitcoin retail demand has dropped to its lowest point in five months, prompting speculation that a significant price rally might follow. Data from CryptoQuant author Axel Adler reveals that Bitcoin demand among retail investors—those with up to $10,000 in transfer volume—has decreased to negative 17% over the past 30 days. This decline parallels a similar dip in January, which subsequently led to a 75% surge in Bitcoin's price.

Historically, a significant drop in retail demand has preceded notable price increases. In January, a drop to negative 18% was followed by Bitcoin's rise from $40,000 to $70,000, coinciding with the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States. This approval propelled Bitcoin to its all-time high of $73,679 in mid-March.

Adler notes that retail investors are quick to react to market changes, indicating that any upcoming market developments could significantly influence Bitcoin's price. Last month, a similar analysis by Adler showed a 31% drop in Bitcoin demand over 17 days, attributed to increased interest in other assets like GameStop (GME) and Ether (ETH), possibly due to the approval of spot Ether ETFs.

Several factors could influence Bitcoin's demand, including the U.S. Consumer Price Index (CPI). Lower CPI figures can make riskier assets like Bitcoin more attractive, as traditional savings offer less lucrative returns when interest rates drop. Markus Thielen, head researcher at 10x Research, suggested that if the CPI falls to 3.3% on June 12, Bitcoin could reach new all-time highs.

Currently, Bitcoin is trading at $67,350, down 3.19% over the past 24 hours, according to CoinMarketCap. This recent drop has resulted in $52.87 million worth of Bitcoin long positions being liquidated, though Open Interest remains above $35 billion. Despite traders' hopes for a quick rebound above $70,000, the asset has yet to recover to this level.

With $2.14 billion in short positions at stake, the upcoming CPI results could play a crucial role in determining Bitcoin's near-term price movements. If the CPI results are favorable, it could trigger a significant rally, potentially replicating the 75% surge seen earlier this year.