Analysis: Bitcoin demand is contracting internally, with multiple indicators showing significant selling by both retail and large investors.

A CryptoQuant analysis report shows that internal demand in the Bitcoin market is contracting significantly in the first three months of 2026. Overall 30-day net demand is -63,000 BTC. Even with accelerated institutional buying (approximately 50,000 BTC from ETFs and 44,000 BTC from Strategy), the market still saw approximately 157,000 BTC sold off by retail investors, whales, and miners. Large holders (1,000–10,000 BTC) have shifted from being the largest buyers to the largest sellers, distributing approximately 188,000 BTC over the past year. Medium-sized holders (100–1,000 BTC) are still buying, but the growth rate has decreased by over 60% since October 2025. The Bitcoin spot price remains at $67,000–$68,000, still representing a premium of approximately 21% over the weighted average cost of $54,286, indicating that most holders are still profitable and the market has not yet bottomed out. A disconnect has emerged between market sentiment and fund flows: the Fear & Greed Index is in the extreme fear zone (8–14), yet ETFs saw net inflows exceeding $1 billion in March; the Coinbase Premium Index remains negative, reflecting limited participation from US institutions. Geopolitical volatility (the Iranian conflict) has led to repeated price fluctuations, with market strategies leaning towards a wait-and-see approach, and overall demand slowly receding rather than panic selling. Although the decline from the all-time high of $126,000 in October 2025 is approximately 47%, far lower than the 85%+ crashes of 2013 and 2017, Zack Wainwright points out that this reflects the gradual maturation of the Bitcoin market, with volatility gradually decreasing. Potential catalysts include: Morgan Stanley's approval of a low-fee Bitcoin ETF, providing access to $6.2 trillion in assets managed by 16,000 financial advisors, and Strategy STRC's continued purchases of 44,000 BTC/month in its preferred stock product, potentially providing stable buying pressure. Short-term technical indicators suggest that Bitcoin could rebound to $71,500–$81,200 if the conflict in Iran eases. Based on a comprehensive analysis of relevant indicators, CryptoQuant concludes that internal demand in the Bitcoin market is contracting, and current price support relies on institutional ETFs, Strategies, and new channels continuously absorbing selling pressure from retail investors and large holders. (CoinDesk)