Who is dumping Bitcoin? The selling pressure from giant whales offsets ETF buying, making the March rebound unable to hide the real demand vacuum.

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Source: Zhitong Finance Network

Data analysis platform CryptoQuant shows that although institutional buying has increased, Bitcoin demand remains under pressure, indicating that the broader market is still selling off the token. As of the end of last month, the “apparent demand” indicator, which measures Bitcoin demand relative to the number of newly mined Bitcoins, was negative, reaching about 63,000 coins. This situation occurred despite a period of strong inflows into exchange-traded funds (ETFs) and continued accumulation of Bitcoin by Strategy Inc. (MSTR.US), a digital asset company under Michael Saylor.

The report states: “Retail investors and other market participants’ sell-offs have exceeded the new buying volume from institutions. The persistent demand contraction since late November 2024 confirms that the overall market is still in a distribution phase.” Data indicates that the market is facing a scenario where new demand is offset by existing holders reducing their positions—this dynamic, even when institutional interest appears to be building, may limit upside potential.

Although Bitcoin barely ended its five-month decline in March, recording a modest rebound of about 2.2%, the overall market rebound momentum appears to lack strength. The core issue is that large holders, known as “whales,” have completely shifted from a long-term accumulation pattern to an aggressive net selling mode. This wave of massive sell-offs has directly offset the bullish sentiment generated by recent spot ETFs and some corporate buy-ins.

Looking at the historical flow of capital, these whale investors accumulated about 200k Bitcoins during the 2024 bull market. However, after the price peaked in mid-2025, this portion of holdings began to loosen significantly and accelerated distribution in the fourth quarter of 2025.

Even though Bitcoin’s price stabilized above $68,000 at the end of March 2026, it still declined nearly 45% from the record high of $126,000 set in October 2025. This structural reduction in holdings reflects early holders’ risk aversion to the current high-interest macro environment and geopolitical volatility. The continued exit of large investors has become a major obstacle to price recovery.

Meanwhile, medium-sized investors who had been increasing their positions are now slowing down their purchases, removing another support level. In recent weeks, Bitcoin demand in the U.S. has also weakened, with Coinbase’s premium index (which measures the price difference between U.S. exchanges and offshore exchanges) turning negative again, indicating that U.S. investors are no longer competing to push Bitcoin prices higher.

Although corporate institutions led by Strategy Inc. continued to expand their holdings in the first quarter of 2026, reaching a new high of about 762k coins, and the U.S. spot Bitcoin ETF saw about $1.32 billion in net inflows in March—reversing a four-month-long outflow—these buying efforts still cannot fully offset the overall selling pressure in the market.

However, CryptoQuant states that if macroeconomic conditions improve, especially if the Iran-U.S. conflict de-escalates, Bitcoin prices could rebound in the short term. The report notes: “Easing geopolitical tensions could serve as a positive catalyst, potentially triggering a rebound rally.”

Looking ahead, due to the continued dominance of selling pressure, the market remains cautious about Bitcoin’s short-term price trend. According to the latest odds from prediction markets like Polymarket, traders believe there is a 74% chance that Bitcoin will fall to $55,000 within the year.

In the context of demand not experiencing explosive growth, the chip turnover between large holders and institutions will continue to drive market volatility. The current situation of “difficult institutional buy-in and large holders retreating” suggests that Bitcoin may need more time to digest the excess supply from high levels before a new trend of upward movement can truly begin.

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Editor: Zhu Hena