Analysis: Bitcoin Demand Contracts Internally, Multiple Indicators Show Clear Retail and Whale Selling

Odaily News CryptoQuant's analysis report indicates that internal demand in the Bitcoin market has been contracting significantly in the first three months of 2026. The overall 30-day net demand stands at -63,000 BTC. Despite accelerated institutional buying (approximately 50,000 BTC via ETFs and 44,000 BTC via Strategy), the market has seen selling of about 157,000 BTC from retail investors, old whales, and miners.

Large holders (1,000–10,000 BTC) have shifted from being the market's largest buyers to its largest sellers, distributing a cumulative ~188,000 BTC over the past year. Medium-sized holders (100–1,000 BTC) are still buying, but their accumulation rate has dropped by over 60% since October 2025. The Bitcoin spot price remains in the $67,000–$68,000 range, still at a ~21% premium compared to the weighted average cost of $54,286, indicating most holders are still in profit and the market has not yet bottomed.

Market sentiment and capital flows are decoupled: the Fear & Greed Index is in the Extreme Fear zone (8–14), yet ETF net inflows exceeded $1 billion in March. The Coinbase Premium Index remains negative, reflecting limited participation from U.S. institutions. Geopolitical volatility (Iran conflict) has caused repeated price swings, leading market strategies to lean towards a wait-and-see approach, with overall demand slowly fading rather than panic selling.

Despite a ~47% decline from the October 2025 all-time high of $126,000, which is far below the 85%+ crashes seen in 2013 and 2017, Zack Wainwright points out that this reflects the Bitcoin market's gradual maturation, with volatility compressing over time.

Potential catalysts include: Morgan Stanley's approval of a low-fee Bitcoin ETF, which would provide access for $6.2 trillion in assets managed by 16,000 financial advisors, and the Strategy STRC preferred share product's continued monthly purchases of 44,000 BTC, potentially providing stable buying pressure for the market. Short-term technical indicators suggest that if the Iran conflict eases, Bitcoin could rebound to the $71,500–$81,200 range.

Synthesizing relevant indicators, CryptoQuant concludes: Internal demand in the Bitcoin market is contracting. Current price support relies on institutional ETFs, Strategy, and new channels continuously absorbing selling pressure from retail investors and large holders. (CoinDesk)