Bitcoin demand cools as retail selling rises and institutions stay cautious

Huoxing Finance reported on April 4 that a CryptoQuant analysis highlights a gap between market mood and capital flows. While the Fear & Greed Index remains in "extreme fear" territory (8–14), crypto ETFs still posted more than $1 billion in net inflows in March. At the same time, the Coinbase Premium Index is still negative, pointing to limited participation from U.S. institutional buyers. CryptoQuant attributes recent choppy trading to geopolitical volatility tied to the Iran conflict. Rather than triggering widespread capitulation, the swings have encouraged a wait-and-see posture, with overall demand fading gradually instead of collapsing through panic selling. Bitcoin is down about 47% from its October 2025 all-time high of $126,000. That drawdown is far milder than the 85%+ crashes seen in 2013 and 2017. Analyst Zack Wainwright said the smaller decline reflects a more mature market where volatility continues to compress. Potential catalysts cited include Morgan Stanley approving a low-fee Bitcoin ETF, which could open access to $6.2 trillion in assets under management across its 16,000 financial advisors. CryptoQuant also pointed to Strategy (STRC) buying 44,000 BTC per month via its preferred stock product, a flow that could provide steadier support. Short-term technical signals suggest that if tensions around Iran ease, Bitcoin could rebound to the $71,500–$81,200 range. Overall, CryptoQuant concludes that internal demand is contracting and current price support depends on institutions continuing to absorb selling pressure from retail investors and large holders through ETFs, Strategy, and additional distribution channels. (CoinDesk)