TL;DR
- Bitcoin’s demand boom fades after more than a year of sustained accumulation, as on-chain and derivatives data show slower inflows.
- U.S. spot Bitcoin ETFs shifted from consistent buying to mixed flows, reducing a major source of market support.
- Analysts point to weakening price structure and rising losses among short-term holders, while long-term metrics and historical cycles continue to frame the move as a market adjustment rather than a structural breakdown.
Bitcoin’s demand boom fades after a prolonged expansion that helped push prices toward recent highs. Fresh research from on-chain analytics firms indicates that while Bitcoin remains one of the most actively traded digital assets, the pace of new demand has cooled. This slowdown has fueled warnings of a deeper price pullback, even as long-term adoption trends remain intact.
Market observers note that accumulation by retail and institutional investors has fallen to levels last seen around twelve months ago. The shift suggests a transition phase, where price action reflects reduced risk appetite rather than a collapse in underlying interest.
BTC Demand Boom Fades As Institutional Activity Slows
Institutional flows have played a decisive role in recent Bitcoin price behavior. On-chain estimates show that U.S. spot Bitcoin ETFs moved from steady net accumulation to periods of net selling, with roughly 24,000 BTC exiting these products. Addresses holding between 100 and 1,000 BTC, often linked to ETFs and corporate treasuries, expanded at a slower-than-average rate.
This moderation followed several strong inflow sessions, including one day that drew more than $450 million, ranking among the largest ETF inflows of the quarter. Still, December recorded redemptions near $100 million, underscoring uneven institutional conviction. Analysts compare the setup to late 2021, when demand softened after an all-time high, while noting that current market liquidity and access are broader.
Derivatives Markets Reflect Lower Risk Appetite
Signals from derivatives markets reinforce the cautious tone. Funding rates declined across major exchanges, pointing to less willingness to hold leveraged long positions by traders. Options data shows demand skewed toward downside protection, with positioning focused on put contracts across multiple time frames.
On-chain data highlights pressure on short-term holders. With Bitcoin trading near $86,000 and many recent buyers holding cost bases above $100,000, average unrealized losses approach 15%. Analysts warn that rebound attempts toward prior entry levels could trigger selling pressure rather than sustained upside. Bitcoin also slipped below its 365-day moving average, a widely tracked long-term trend indicator.
Despite these challenges, longer-term metrics provide context. Bitcoin’s realized price near $56,000 aligns with zones historically seen in later stages of drawdowns. Key support around $70,000 remains critical, and even a deeper move would leave Bitcoin well above levels from previous cycles.
