Bitcoin ETFs and Institutions Are Buying, So Why Is Spot Demand Still Weak? (CryptoQuant)

In recent weeks, Bitcoin exchange-traded funds (ETFs) and some institutional investors have continued to accumulate the cryptocurrency, yet spot demand remains weak. Market research platform CryptoQuant has analyzed this situation in its latest weekly report, attributing the persistence of contraction to broader market selling pressure outweighing institutional buying.

Despite the positive developments in ETF purchases and institutional interest, the broader market has shown significant selling pressure. Retail investors and other market participants are selling at a pace that offsets the incremental buying from institutions, sustaining the current wave of distribution. This trend has been evident for several months, with spot demand remaining in deep contraction since late November 2025.

In March, ETF 30-day purchases surged to approximately 50,000 bitcoin, marking the highest level since October 2025. Similarly, the business intelligence entity Strategy recorded a 30-day accumulation of around 44,000 BTC. However, these figures are overshadowed by the 30-day apparent demand growth, which stood at -63,000 BTC by the end of March. This figure underscores the persistent selling pressure in the broader market.

The sustained contraction in spot demand since late 2025 confirms that the market is in a distribution phase. Among other market participants, Bitcoin whales have become net distributors, with their one-year holdings changing by -188,000 BTC. These investors accumulated over 200,000 BTC in 2024 but began aggressively distributing from mid-2025, with an accelerated pace in the last quarter of that year and early 2026.

CryptoQuant's analysis highlights that the 365-day simple moving average (SMA) remains in a declining trend, indicating that this distribution is structural rather than temporary. Historically, prolonged negative whale accumulation has coincided with periods of significant price weakness, and the current reading suggests that selling remains a substantial structural headwind.

In contrast to whales, mid-tier holders, or dolphins, have remained net accumulators but at a reduced pace. While this group's behavior is less aggressive than that of whales, their continued accumulation provides some support to the market.

The weak spot demand, despite institutional buying and ETF growth, raises questions about the future trajectory of Bitcoin's price. The persistent selling pressure from retail investors and other market participants may limit the upside potential, even as institutions and ETFs continue to accumulate.

In conclusion, the current crypto market conditions show a complex interplay of forces. While Bitcoin ETFs and some institutions are in an accumulation mode, the broader market's selling pressure, particularly from retail investors, is counteracting this trend. This dynamic has led to sustained contraction in spot demand, highlighting the challenges Bitcoin faces in recovering from its recent downturn. As the market continues to evolve, it will be crucial to monitor the balance between institutional buying and broader market sentiment to gauge the potential for a rebound.