Bitcoin (BTC) price has been trapped in a box range for the past month, raising questions about why prices are not rising despite institutional investors' buying. In particular, as Exchange Traded Funds (ETFs) and corporate investors are purchasing Bitcoin in large quantities without showing a clear upward trend, analyses suggesting a decrease in overall market demand are gaining credibility.
Market analysis firm CryptoQuant recently reported that Bitcoin purchases by US ETFs decreased from 86,000 BTC to 40,000 BTC between November last year and mid-May this year, a reduction of approximately 53%. Corporate purchases by companies like MicroStrategy also sharply declined by nearly 90%, from 171,000 BTC to 16,000 BTC.
While institutional investors' buying is certainly a positive factor, it remains only a small part of overall demand. In December last year, when Bitcoin reached its peak, ETF and institutional investments accounted for only 33% of total demand increase, purchasing approximately 257,000 BTC out of 771,000 BTC. This suggests that unofficial demand is much larger, and its contraction is a key factor explaining recent price stagnation.
In the past 30 days, total Bitcoin demand has reportedly decreased by about 895,000 BTC. Explicitly confirmed demand reduction reached 857,000 BTC, while total inflows from ETFs and institutional investments were approximately 748,000 BTC. CryptoQuant diagnosed that this difference places significant burden on the market.
Bitcoin's ability to maintain the $100,000 level is due to net purchases by institutions and ETFs, but strong price rallies are difficult to expect without overall demand expansion. Experts commonly agree that while a substantial portion of Bitcoin demand is formed through untraceable personal and unofficial channels, ETFs and institutions have limitations in driving prices higher when these channels are constrained.
To trigger market recovery, new liquidity inflow is essential, and ETF purchases or corporate reserves are insufficient. CryptoQuant pointed out that "While Bitcoin purchases by ETFs and MicroStrategy are positive signals, their actions alone are inadequate to break all-time highs." A broader and more substantial demand recovery is necessary to regain price momentum.
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