Bitcoin's Internal Demand Shrinks as Retail, Whales and Miners Net Sell 157,000 BTC in Q1 2026

Odaily Planet Daily reports that CryptoQuant data show a sharp contraction in Bitcoin's internal market demand in the first quarter of 2026. Thirty-day net demand totaled about 63,000 BTC. Even with faster institutional accumulation—roughly 50,000 BTC through ETFs and about 44,000 BTC via Strategy—the market still absorbed net selling of around 157,000 BTC from retail investors, long-term whales and miners. CryptoQuant notes that large holders with 1,000–10,000 BTC have flipped from the market's biggest buyers to its biggest sellers, distributing approximately 188,000 BTC over the past year. Mid-sized holders with 100–1,000 BTC are still net buyers, but their buying pace has fallen by more than 60% since October 2025. Spot Bitcoin continues to trade around $67,000–$68,000, about a 21% premium to the weighted average cost basis of $54,286. That suggests most holders remain in profit and the market has yet to form a bottom. Sentiment and flows are diverging. The Fear & Greed Index sits in extreme fear at 8–14, while ETFs logged more than $1 billion in net inflows in March. The Coinbase Premium Index remains negative, pointing to limited participation from U.S. institutions. Geopolitical volatility tied to the Iran conflict has repeatedly jolted prices, pushing participants into a wait-and-see stance. CryptoQuant characterizes the demand drop as gradual rather than driven by panic selling. Bitcoin is down roughly 47% from its October 2025 all-time high of $126,000—far less severe than the 85%+ drawdowns seen in 2013 and 2017. Analyst Zack Wainwright attributes the comparatively smaller decline to a maturing market with narrowing volatility. Potential catalysts cited include Morgan Stanley approving a low-fee Bitcoin ETF, which would open access to $6.2 trillion in assets under management via 16,000 financial advisors. Another source of support could be continued monthly purchases of 44,000 BTC through Strategy's STRC preferred stock product. On the technical side, short-term indicators suggest that if Iran-related tensions ease, Bitcoin could rebound toward $71,500–$81,200. CryptoQuant concludes that current price support depends on institutional ETFs, Strategy-related demand and new distribution channels that can keep absorbing selling pressure from retail investors and large holders. (CoinDesk)