Bitcoin demand-supply ratio drops to 1.3: Market faces triple pressures analysis

By the end of Q1 2026, the crypto market is undergoing a deep correction driven jointly by the macro environment and on-chain structure. On one hand, an indicator that measures the relative strength of Bitcoin market demand— the Absorption-to-Emission Ratio— has sharply fallen from 5.3x in late February to 1.3x, approaching the critical point where demand and supply are in balance. On the other hand, the yield on U.S. 10-year Treasury Inflation-Protected Securities (TIPS) has risen to above 2%, reaching a new nearly 9-month high, which directly exerts valuation pressure on zero-yield risk assets including Bitcoin. At the same time, the total market value of stablecoins—the key on-ramp channel for fiat inflows—has grown significantly more slowly, indicating insufficient external incremental liquidity to replenish the market.

Starting from on-chain reserve data, this article systematically lays out the causal relationships among supply-demand structure, the macro rate transmission path, and the stagnation of capital inflows. Using a multi-model analysis framework, it examines the veracity of the current market narrative and projects several possible evolutionary paths under different scenarios.

Three Signals Tighten in Sync: Demand, Interest Rates, and Liquidity Turn Together

Recently, the market has shown three highly synchronized structural changes:

• Bitcoin demand-to-supply ratio drops sharply: This reflects that the metrics of institutional investors and whale absorption capacity have fallen from more than 5x to 1.3x, indicating a significant weakening in the market’s ability to digest miners’ daily output.
• U.S. real rates keep rising: The 10-year TIPS yield breaks above 2%, setting a new high since June 2025, putting an explicit downward squeeze on assets that generate no cash flows.
• Stablecoin growth stalls: After several months of growth, the total market value of major stablecoins has entered a plateau, suggesting that fiat inflow to the market is slowing.

These three factors are not independent; they point to a single core conclusion: the crypto market is transitioning from a “strong demand-driven” phase to a phase characterized by “tight demand-supply balance alongside macro suppression.”

From 5 to 1.3: The Timeline of the Demand Drop Revealed by On-Chain Reserve Data

Since Bitcoin completed its fourth halving in April 2024, the market structure has undergone two key switches:

The demand-to-supply ratio indicator (Absorption-to-Emission Ratio) reached a stage high of 5.3x at the end of February 2025, corresponding to Bitcoin trading in a high-price range at that time. Since then, the indicator has continued to fall, dropping to 1.3x by the end of March, setting a new low for the year.

Bitcoin’s daily incremental supply is determined by miner output. Under the current protocol rules, an average block is produced every 10 minutes. Each block reward is 3.125 BTC, so daily new supply is approximately 450 BTC.

The Absorption-to-Emission Ratio calculates the multiple of how much market demand absorbs the new supply. A ratio greater than 1 means the market can fully digest miners’ sell pressure and still maintain net demand; a ratio close to or below 1 implies demand weakness, and the market may rely more on battles for existing liquidity.

• Late February 2025: Ratio 5.3x

This phase corresponds to sustained net inflows into U.S. spot ETFs and rapid expansion in stablecoin market value. The market is in a “strong demand” range where demand far exceeds miners’ daily output.

• End of March 2026: Ratio 1.3x

The current ratio indicates that market demand is only slightly higher than miners’ daily sell pressure. This means:

• The market’s ability to absorb new supply has weakened significantly;
• Price increases require sustained capital inflows far above the current level, not merely relying on a supply-side narrative.

From on-chain reserve data, the accumulation speed of addresses holding more than 1,000 BTC has slowed over the past 60 days. Meanwhile, the net outflow size of BTC from exchanges has narrowed in sync, further supporting the assessment that institutional-level demand is fading.

Quantifying Macro Suppression: How TIPS Real Yields Affect Zero-Yield Assets

TIPS yields represent the real risk-free return after stripping out inflation. As a zero-yield asset, Bitcoin’s pricing is highly sensitive to real interest rates. Historical data shows that when 10-year TIPS yields rise rapidly, Bitcoin often faces valuation compression pressure.

As of April 2, 2026, based on Gate market data:

• BTC price: $66,408.5
• 24h change: -2.53%
• Market cap: $1.41T

The current 10-year TIPS yield remains above 2%, up more than 100 basis points from the 2025 low. This change directly alters the opportunity cost of capital: compared to traditional allocators weighing real bond yields versus potential Bitcoin returns, their required risk premium for the latter increases significantly.

Stablecoins serve as an important liquidity bridge between traditional financial markets and crypto. As of end-March 2026, the total market value of major stablecoins has increased by less than 3% versus the beginning of the year, starkly contrasting with the prior two years where quarterly growth frequently reached double digits.

Stablecoin growth slowing implies reduced momentum for fiat capital inflows into the crypto ecosystem. In the absence of continuous injections of new funding, market trading relies more on rotation of existing liquidity, and price elasticity declines.

Market Divergence Scan: Is It Institutional Withdrawal, Retail Absence, or Macro Domination?

There are three major viewpoints and debates in the market regarding the structural changes above:

View 1: Macro suppression is a short-term phenomenon; the market will replay the “rate peak—risk asset rebound” path

Supporters argue that the rise in TIPS yields is mainly driven by repeated changes in inflation expectations, not an upside growth surprise. If future economic data weakens, the Federal Reserve may release signals of easing, pushing real rates back down and benefiting zero-yield assets.

View 2: The demand structure has fundamentally changed; the ETF-driven “institutional bull” is entering a bottleneck period

This view points out that the marginal efficiency of spot ETF inflows has already fallen significantly, and that stablecoin growth stagnation shows that retail investors and offshore capital have not taken over. The market needs a new demand narrative (such as corporate reserves or sovereign fund allocations) to drive the next round of structural market action.

View 3: The demand-to-supply ratio breaking below 2 is a bearish warning signal

Historical experience suggests that when the Absorption-to-Emission Ratio remains below 2 for an extended period and is accompanied by macro liquidity tightening, the market often enters a phase where the price center of gravity shifts downward. Some analysts believe the market has already entered a “passive absorption/erosion” range, where price support is fragile.

Structural Shocks: Repricing the Miner, Capital Flow, and Real Yield Tracks

The three factors above are causing structural impact across the crypto industry:

For the miner ecosystem

A demand-to-supply ratio nearing 1 means miners’ sell pressure has a higher influence weight on prices. Some high-cost mining operations face profitability pressure, which may trigger changes in mining power concentration.

For trading structure and product innovation

Against the backdrop of macro suppression of zero-yield assets, attention toward products related to real yield crypto is increasing. Tracks such as staking yields, tokenized on-chain treasuries, and interest-rate derivatives are attracting more capital interest.

For market capital flow direction

Stablecoin growth stagnation encourages capital to rotate more within ecosystems like Ethereum and Solana rather than making large cross-system inflows. This leads to lower overall market volatility, but structural opportunities still exist.

Next Three Months: Three Scenario-Based Market Evolution Paths

Based on current facts and logic, the following are three plausible scenarios for the next 3–6 months:

At present, the market leans toward the continuation of Scenario B: the macro rate environment will not quickly reverse, but a systemic credit crisis will also not appear. This means that within the near term, the recovery of price elasticity needs to rely on new demand sources or supply-side events (such as repricing driven by miner halving effects).

Conclusion

The decline in the Bitcoin demand-to-supply ratio from 5x to 1.3x is not an isolated on-chain metric change; it is the result of a convergence among macro rate suppression, stablecoin liquidity stagnation, and the retreat of institutional demand. The market is currently in a transition period from a “strong demand narrative” to a phase constrained by both macro and on-chain factors.

For participants in the crypto industry, understanding the pricing logic of real yield crypto, treating changes in stablecoin market value as a leading indicator, and tracking structural changes in on-chain reserve data will become key analytical frameworks for the remainder of 2026. The market will not remain in a single state for long, but when the next phase of structural market action starts, it will require a clear macro inflection point or the entry of a new demand主体 as a catalyst.