Bitcoin Demand Contracting Rapidly Amidst Whale Selloffs and ETF Outflows

Key Insights

• Spot Bitcoin demand is contracting at the fastest pace since January amid price struggles
• The top crypto is currently experiencing significant ETF outflows
• Bitcoin could see further decline in value as macroeconomic conditions force institutional investors to pull back.

Spot Bitcoin demand has weakened significantly in the past few weeks, hinting at a potential bearish turn for the asset. CryptoQuant head of research, Julio Moreno, disclosed this in a post on X.

According to Moreno,  spot demand is now contracting at the fastest pace since January 10. While spot Bitcoin demand has been mostly negative in 2026, contraction has not been this rapid since early in the year.

According to CryptoQuant data, the 30-day SMA for Bitcoin apparent demand has been in the -40,000 BTC to -100,000 BTC range over the past week. Interestingly, the rapid contraction coincides with a decline in Bitcoin speculative demand.

Moreno had earlier stated that speculative interest has been the major force behind Bitcoin demand. Even as spot interest has faltered, speculative demand from perpetual futures has driven the flagship asset’s recent rally.

However, it peaked when BTC approached $80,000. That slowdown, coupled with already weak spot demand, has now caused Bitcoin’s total demand to start contracting on May 18.

Bitcoin ETFs See Massive Outflows for Second Consecutive Week

The recent contraction appears to have been heavily influenced by the massive outflows from Bitcoin exchange-traded funds (ETFs). Spot Bitcoin ETFs have long been a major source of demand, with six consecutive weeks of inflows.

However, they recorded a net outflow of over $1 billion last week and now look set for a repeat this week. Monday alone saw $648.6 million in outflows, the highest since January 29.

The outflows continued for the rest of the day, totaling $331 million on Tuesday, $70.5 million on Wednesday, and $100.9 million on Thursday. There have now been five days of consecutive outflows, with Friday threatening to make it six.

Bitcoin Slips Further as Analysts Note Limited Institutional Interest

Meanwhile, Bitcoin has fallen further today, dropping by 2.25% to $75,700. The decline now puts Bitcoin in the red on its weekly and monthly performance, extending its year-to-date loss to 13.5%.

This is a far cry from its recent rally during which it rose to above $82,000. However, analysts are not entirely surprised, noting that the rally was largely driven by speculative demand.

Cryptoquant analysts note the Coinbase Bitcoin premium had also been negative for most of the year, even during the rally. This suggests that the US and institutional investors never really got involved.

Historically, sustained Bitcoin gains usually require a positive Coinbase premium.  However, that premium is unlikely to turn positive anytime soon, as Coinbase is seeing its strongest selling pressure since February.

Analysts note that this selling pressure stems from institutional investors rotating capital out of Bitcoin and similar assets into equities amid macroeconomic uncertainties and geopolitical tensions.

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