Institutional bids based on Bitcoin are being made under fire.
According to SwissBlock data shared on Tuesday, the US Spot Bitcoin ETF has absorbed a net 4,500 BTC since the start of the year, an unusually small number considering the commodity was a structural buyer driving the 2025 bull market.
March and April brought steady accumulation that helped lift Bitcoin from lows near $65,000, but May reversed itself with just three days left until the end of the month.
“After strong accumulation in March and April, May saw a return to circulation,” Swissbloc said in a post. “The risk index is now entering high-risk territory, and at the same time ETF flows are deteriorating. This indicates that spot ETF demand is no longer able to absorb selling pressure effectively.”
The reversal is significant because Bitcoin’s previous several rallies have required ETF purchases to clear out supply from miners, long-term holders, and short-term profit-taking traders.
When the bid is low, the supply must find another buyer, or the price will fall to the level where a buyer appears. Swissbloc’s argument is that the risk index, which measures structural selling pressure on absorption, can continue to rise as long as the ETF channel remains in circulation.
Bitcoin was trading at $75,808 in Asian time on Tuesday, down 2.6% in the past month and sitting near the bottom of its May range. The cryptocurrency briefly traded above $82,000 in early May before the producer price index was released, but subsequently fell below $80,000 due to macro stress. ETH, XRP, and Solana were all in the red, with Zcash leading the decline with a 9% drop on the day.
Swissblock’s measurements are the latest in a series of on-chain data pointing in the same direction.
As CoinDesk reported on Tuesday, apparent demand, which measures how much Bitcoin the market is absorbing compared to new supply, has returned to its weakest level since December.
CryptoOnchain notes that US spot ETFs have withdrawn $1.74 billion in the past two weeks, as well as retail traders adding leverage in hopes of a reversal, a combination that has historically taken place before a sharp liquidation cascade occurs when the market moves against the crowd.
What the data doesn’t yet tell traders is whether this is a pause or a reversal.
ETF purchases have declined previously during this cycle, but without leading to deeper drawdowns. Meanwhile, global stock markets are at record highs, and FXPro’s Alex Kupczykevich said Bitcoin’s 50-day moving average and 200-day moving average are on track to cross in the coming weeks, a setup known as a golden cross that is commonly interpreted as bullish.
However, demand for ETFs is a channel that has brought in new capital. If that channel remains in circulation, the structural basis for the bull market that began in April will begin to weaken.
