Some friends asked, with ETFs continuing to flow in and MSTR continually increasing holdings, why is the BTC price dropping?
From CryptoQuant's 30-day demand growth data, we can see a set of very contradictory signals:
ETF demand (pink area) and MSTR demand (purple area) have indeed shown a noticeable recovery since mid-March, and the total buying volume is expanding. From the trend arrows on the right side of the chart, it is clear that institutional demand is increasing.
But the problem lies in the blue area—Apparent Demand (the apparent demand, excluding ETF and MSTR).
This indicator reflects the real change in on-chain spot demand. Since early February, this data has been deeply trapped in negative value territory, with the deepest point nearing a 30-day net shrinkage of -120,000 BTC. Even by late March, although the shrinkage has somewhat narrowed, it still remains steadily below the zero axis.
In other words, for every BTC bought by ETFs and MSTR, other participants on-chain may be simultaneously selling two or even more.
This is the real reason for the continued weakening of prices: the buying speed of institutions cannot keep up with the overall selling speed of the market.
To put it metaphorically, it's like a pool of water, where ETFs and MSTR are two inflow pipes, indeed pouring water in; but there is a larger outflow at the bottom of the pool simultaneously draining water. If you only focus on the inflow pipes, you would think the water level should rise; but in reality, the water level has been falling.
So when we assess BTC's demand, we cannot only look at ETF net inflows and MSTR's announcement of increased holdings. These are public and easily tracked data, but they are just the tip of the iceberg. The true full picture is hidden in the on-chain data—those silent, exiting funds are the main force determining the direction of prices.