According to a report from CryptoQuant, Bitcoin’s apparent demand at the end of March registered a negative 63,000 BTC, even though major investors such as the Bitcoin spot ETFs and Strategy continue their purchasing. Large wallets, which typically held between 1,000 and 10,000 BTC, have turned into major sellers.
Despite these institutions buying about 94,000 BTC collectively in March, the net demand remains negative, indicating that individual investors, existing large holders, miners, funds, and other market participants sold approximately 157,000 BTC during the same period. This shift is characterized by incredibly rapid selling from so-called whales.
The spot price of Bitcoin is currently 21% above the realized price, suggesting that the market may not have reached its bottom. The realized price is the weighted average purchase price of all coins on the network, and historically, when the spot price is above this, it indicates that the market hasn’t bottomed out.
Previous cycles indicated that a market bottom was approaching when the spot price dropped below the realized price. However, the situation today appears different, although the gap is narrowing. Bitcoin’s premium over the realized price has decreased significantly over the past 15 months.
Despite entering a zone of extreme fear, with the Fear and Greed Index hovering between 8 and 14, Bitcoin ETFs still saw net inflows exceeding $1 billion in March. This scenario reflects a unique combination of extreme fear and intense institutional buying, yet it hasn’t restored confidence across the market.
The evolving geopolitical situation with Iran also clouds the market, making it difficult for buyers to establish clear positions. Bitcoin has been trading between $65,000 and $73,000 during ongoing tensions, with price movements correlating with the headlines about the conflict escalating or de-escalating.
Investors are increasingly cautious, leading to gradual market exits instead of panic selling or aggressive positions. Despite Bitcoin’s recent decline of about 47% from its all-time high of $126,000 in October, this drop is not as severe as previous cycles, indicating potential market maturation.
Morgan Stanley’s recent approval of a Bitcoin ETF with a lower fee could provide a new catalyst for the market. Strategy’s continued accumulation, supported by significant capital inflows, may also sustain buying pressure. However, whether this will suffice to stabilize the market remains uncertain, dependent on these entities absorbing the selling pressure from other market participants.