Analysis: Bitcoin Demand Contracts Internally, Multiple Indicators Show Clear Selling by Retail and Large Holders

Odaily According to a CryptoQuant analysis report, in the first three months of 2026, internal demand in the Bitcoin market is contracting significantly. The overall 30-day net demand was -63,000 BTC. Even with accelerated institutional buying (approximately 50,000 BTC by ETFs and 44,000 BTC by Strategy), the market still saw 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 biggest buyers to its biggest sellers, distributing a cumulative total of about 188,000 BTC over the past year; medium holders (100–1,000 BTC) are still buying, but their growth rate has declined by over 60% since October 2025. The Bitcoin spot price remains at $67,000–$68,000, still at a premium of about 21% compared to the weighted average cost of $54,286, indicating that most holders are still profitable 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 continued limited participation from U.S. institutions. Geopolitical volatility (Iran conflict) has caused repeated price fluctuations, leading market strategies to lean towards a wait-and-see approach, with overall demand slowly fading rather than panic selling.

Despite a decline of about 47% from the October 2025 all-time high of $126,000, which is far below the 85%+ crashes of 2013 and 2017, Zack Wainwright points out that this is a sign of the Bitcoin market gradually maturing, with volatility compressing over time.

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

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