Bitcoin (BTC) demand remains weak even as some institutional buying continues, according to onchain analytics firm CryptoQuant.

The firm said bitcoin spot demand is still in "deep contraction," with 30-day apparent demand growth at around -63,000 BTC as of late March, indicating that selling pressure in the market is still stronger than buying.

Bitcoin purchases by exchange-traded funds and Michael Saylor’s Strategy have increased, yet that has not been enough to ease pressure. ETF 30-day purchases rose sharply last month, reaching around 50,000 BTC, the highest since October 2025, while Strategy's 30-day accumulation has remained elevated at around 44,000 BTC, CryptoQuant noted.

"Despite this institutional acceleration, total apparent demand continues to contract, indicating that selling from retail and other market participants is more than offsetting incremental institutional buying," the firm said. "The sustained demand contraction, now persisting since late November 2025, confirms that the broader market remains in distribution."

Large bitcoin holders or "whales" with 1,000 to 10,000 BTC have turned "net distributors," CryptoQuant said, meaning they are reducing their holdings overall. Their holdings have dropped sharply over the past year to -188,000 bitcoin, the firm noted. After buying more than 200,000 bitcoin in 2024, whales started reducing holdings from mid-2025, with a faster pace in late 2025 and early 2026, CryptoQuant said.

"The 365-day SMA [simple moving average] remains in a declining trend, confirming that this distribution is structural rather than temporary," CryptoQuant said. "Historically, sustained negative whale accumulation has coincided with periods of prolonged price weakness, and the current reading suggests selling remains a significant structural headwind."

Meanwhile, mid-sized bitcoin holders or "dolphins" with 100 to 1,000 BTC are still accumulating on a yearly basis, but at a much slower pace, according to CryptoQuant.

These holders have reduced their accumulation pace since November 2025, with the one-year change in holdings falling from a cycle peak of almost 1 million bitcoin in October 2025 to 429,000 bitcoin currently, a decline of more than 60%, CryptoQuant noted.

Demand from U.S. investors has also weakened in recent weeks. The Coinbase premium, which tracks U.S. buying interest, has stayed mostly negative even as bitcoin prices dropped into the $65,000 to $70,000 range. This shows U.S. investors "have not yet re-entered the market at scale, consistent with the demand contraction seen across onchain metrics," CryptoQuant said.

Overall, despite weak demand, CryptoQuant said a short-term price bounce is still possible if macro conditions improve, particularly if the U.S.-Iran conflict de-escalates. Bitcoin could then rise toward the $71,500 to $81,200 range, the firm said, noting these levels are key resistance zones in a bear market.

"A de-escalation of geopolitical tensions could serve as a near-term positive catalyst, potentially triggering a relief rally toward the $71,500 lower Band. If buying momentum builds, the next key resistance is the Trader Realized Price at ~$81,200, a level that capped the January 2026 bear market rally," CryptoQuant said.