Bitcoin Demand Structure Thins from Within Amid Institutional Buying

Bitcoin's demand structure has been under scrutiny in recent weeks, with several data sources indicating a decline in overall market participation. According to CryptoQuant, the 30-day apparent demand for Bitcoin has turned negative, suggesting that institutional buyers are struggling to absorb the selling pressure from other market participants.

The study points out that even though institutions have accelerated their purchases, they are still unable to stem the tide of selling. In March, ETFs purchased approximately 50,000 BTC, while Strategy's accumulation held steady at around 44,000 BTC. However, this represents a relatively small portion of the overall market, with retail investors and other participants contributing significantly to the net demand.

The analysis also highlights the role of large holders in driving the current trend. These wallets, which hold between 1,000 to 10,000 BTC, have turned from being major buyers to significant sellers. Over the past year, they have collectively distributed nearly 188,000 BTC, marking one of the most aggressive distribution cycles on record.

Furthermore, the study notes that mid-tier holders, which hold between 100 to 1,000 BTC, are still technically accumulating but at a much slower pace than previously. Their annual additions have collapsed by over 60% since October 2025, from nearly 1 million BTC to around 429,000.

The realization price compression metric also indicates that the average holder is still in profit, which historically suggests that the market has not yet bottomed. However, the gap between the spot price and realized price is closing rapidly, with a premium of only 21% at present. This compares to a premium of around 120% in late 2024.

The study concludes that the current drawdown compression may not resolve with the violent capitulation flush that marked previous cycle bottoms. Instead, it suggests that Bitcoin's maturity and increased institutional participation are leading to reduced volatility on both the upside and downside.