Over the past 30 days, many institutions have loaded up Bitcoin (BTC) bags. However, these purchases did not have a significant impact on the prices of major digital assets. This has sparked concern among market participants.
It reached an all-time high (ATH) in late May, so I’m wondering why BTC is stuck within tough ranges.
A recent report from a market intelligence company revealed why price momentum is weak despite sustained institutional demand. Analysts say it’s not enough right now.
Despite institutional demand, BTC stalls
According to Cryptoquant, BTC has seen a decline in purchases from the US-based Exchange Trade Fund (ETF) and the Ministry of Corporate Treasury, which belong to companies like Strategies, compared to the November-December 2024 period.
ETF purchases have now dropped from 86,000 BTC in early December to 71,000 BTC in mid-May, and are currently 40,000 BTC. This trend represents a 53% decline over this period.
At the same time, the strategy acquisition has fallen from 171,000 BTC in December to 16,000 BTC today. This indicates a 90% drop during the period.
Institutional purchases and ETF flows have kept BTC above $100,000 for some time, but further declines could slow price increases. This can be exacerbated by the fact that ETFs and institutional purchases represent a part of the demand for the entire BTC.
At the market peak in December, ETFs and institutional purchases accounted for 33% of total demand growth in Bitcoin demand. These entities purchased less than 257,000 BTC out of a total of 771,000 BTC. This indicates that the Bitcoin market has a greater unobservable demand from other sources.
Overall demand is contracted
Currently, overall demand for BTC is under contract, dropping by 895,000 BTC over the past 30 days. This metric must be extended for a sustainable price rally to occur. However, current levels of demand from institutions are not sufficient to cause that expansion.
Cryptoquant said Bitcoin’s annual growth chart reflects how ETFs and institutional purchases explain only a portion of the demand. The apparent demand is also contracted by 857,000 BTC, significantly offsetting the expansion of ETF and institutional demand (377,000 and 371,000 BTC, respectively).
“The bottom row means that ETF and MSTR Bitcoin purchases are generally positive against the rising price of Bitcoin, but not enough to raise prices to an all-time high,” the market intelligence company added.
