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 persistent contraction in spot demand to broader market selling pressure outweighing institutional buying.

Despite the positive developments in ETF purchases and institutional interest, the broader market is experiencing significant selling pressure from retail investors and other participants. This selling activity is more than offsetting the incremental buying by institutions, sustaining the current wave of distribution.

In March, ETF 30-day purchases surged to approximately 50,000 bitcoin (BTC), marking the highest level since October 2025. Similarly, the business intelligence entity Strategy recorded a 30-day accumulation of around 44,000 BTC. However, the 30-day apparent demand growth stood at -63,000 BTC by the end of March, reflecting the ongoing selling pressure in the market.

This contraction in spot demand has been persistent since late November 2025, confirming a distribution phase. Among other market participants, Bitcoin whales have become net distributors, with a one-year change in their holdings reading -188,000 BTC. These investors accumulated over 200,000 BTC in 2024 but began distributing aggressively from mid-2025, with an accelerated pace in the last quarter of the year and early 2026.

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

While whales have turned bearish, mid-tier holders, also known as dolphins, have remained net accumulators, albeit at a reduced pace. The one-year change in dolphin holdings has been positive, though the rate of accumulation has slowed.

In contrast to the weak spot demand, the institutional and ETF buying has provided some support. However, the overall market sentiment remains cautious, with many retail investors still hesitant to enter the market. This hesitation, combined with the aggressive selling by whales, is contributing to the weak spot demand.

Despite the challenges, there are signs that Bitcoin may see some relief in the near future. As institutional interest continues to grow and ETFs accumulate more bitcoin, there is potential for a rally. However, the persistent selling pressure from whales and other market participants will need to abate for spot demand to recover meaningfully.

In conclusion, while Bitcoin ETFs and institutions are actively buying, the broader market's selling pressure is keeping spot demand weak. The structural distribution by whales and other participants is a significant headwind, but the growing institutional interest offers a glimmer of hope for a potential recovery. As the market dynamics evolve, it will be crucial to monitor the balance between buying and selling pressures to gauge the future trajectory of Bitcoin prices.