CryptoQuant Thinks Bitcoin is Not Bullish Yet! Looking at Their Recent Discovery

2025-04-23

As the calendar turns into Q2 of 2025, Bitcoin’s market movement is witnessing a cautious stabilization. The flagship cryptocurrency, which once seemed poised for a swift recovery, is now facing headwinds that are far more persistent than many might have anticipated.

According to on-chain data analytics firm CryptoQuant, Bitcoin's price momentum is stabilizing, but the underlying demand is still far from reaching the levels needed for a sustainable rally. Here’s why CryptoQuant remains cautious in its outlook and why Bitcoin’s bullish case isn’t yet back.

On-Chain Demand: Stabilizing, But Not Strengthening

Bitcoin’s apparent demand has experienced a relative reprieve in recent weeks, yet a full recovery remains elusive. Over the last 30 days, Bitcoin has seen a modest decline in apparent demand—by 146,000 BTC. This is a clear improvement over the sharper 311,000 BTC drop recorded on March 27. However, this shift masks a deeper issue: demand momentum is still weakening.

Demand momentum, which tracks the buying activity of new investors relative to long-term holders, has deteriorated significantly. CryptoQuant’s data reveals a drastic 642,000 BTC decline in demand momentum, marking the worst figure since October 2024.

This is an alarming indicator that the market is still not attracting the fresh capital required to fuel a robust rally.

While short-term corrections and market consolidations are part of Bitcoin’s typical cycle, this lack of strong demand momentum raises concerns.

Historically, Bitcoin has shown resilience when both demand and momentum align. However, without significant inflows from new participants or a renewed interest from institutional investors, Bitcoin’s path upward will remain lackluster.

CryptoQuant analysts point out that for Bitcoin to break past the current stagnation phase, it needs more than a slow bleed of demand. Both demand and momentum need to stabilize and ideally begin to trend positively for a true bull market to emerge.

This isn’t just about price stabilization—it’s about re-establishing the market dynamics that push Bitcoin to new highs.

ETF Inflows Plateau: Institutional Appetite Wanes

Once heralded as a game-changer for Bitcoin’s mainstream adoption, the role of U.S.-based Bitcoin ETFs in market dynamics is now under closer scrutiny. The trend of institutional participation, which saw Bitcoin ETFs acting as major liquidity providers and price movers, has flatlined since late March.

CryptoQuant's data indicates that net purchases by U.S. Bitcoin ETFs have oscillated between -5,000 BTC and +3,000 BTC per day—far below the 8,000+ BTC daily inflows seen during the bullish surge of November–December 2024. This stagnation is a clear signal that institutional appetite for Bitcoin has cooled, at least in the short term.

Comparing 2025 to the same period in 2024 offers a stark contrast. In 2024, U.S.-based Bitcoin ETFs had accumulated a net 208,000 BTC in the first quarter. In 2025, however, they have sold a net 10,000 BTC.

The reduced appetite for Bitcoin from institutional players is a crucial development, as these players often provide a floor for Bitcoin’s price during volatile periods.

Analysts have long believed that renewed ETF inflows are a key catalyst for Bitcoin’s price momentum. With institutional interest waning, the prospects for a sharp rally are significantly hindered.

While institutions remain involved, the current level of participation is insufficient to provide the liquidity necessary to push Bitcoin beyond the psychological resistance levels.

Whales Retreat, Accumulation Stalls

Bitcoin’s largest holders, the so-called "whales," have traditionally been a bellwether for Bitcoin’s long-term prospects. When whales accumulate, the market tends to see price appreciation. Conversely, when they start to sell or reduce their holdings, it can signal either a market correction or a protracted consolidation phase.

In the past week, large Bitcoin holders have reduced their positions by approximately 30,000 BTC, signaling a shift in sentiment. This move comes amid broader signs that whales, who had previously been increasing their holdings, have pulled back.

Their accumulation rate, which was a robust 2.7% in late March, has since plummeted to just 0.4%—the lowest rate since February 20, 2025.

This slowdown in whale accumulation is significant because it suggests that even the most sophisticated market participants are less confident in Bitcoin’s immediate future.

When whale behavior shifts from accumulation to distribution, it often marks a pivotal moment in the market cycle. While it doesn’t necessarily signal an impending crash, it does point to a cautious outlook, which can suppress price growth.

The collective actions of whales—who control a large portion of Bitcoin’s supply—are instrumental in shaping the market’s direction. Until whales return to a phase of consistent accumulation, Bitcoin’s upside potential will remain constrained.

Liquidity Expansion Fails to Meet Bull Market Thresholds

Liquidity is often referred to as the lifeblood of financial markets. For Bitcoin, the liquidity narrative is currently one of moderate growth, but nothing that suggests a booming market.

The market cap of USDT (Tether), a widely used stablecoin and liquidity proxy, has grown by $2.9 billion over the last two months. While this is a positive development, it still falls short of the $5 billion threshold typically associated with strong Bitcoin rallies.

This underwhelming liquidity expansion signals that there isn’t enough market depth to sustain large, coordinated price movements. Historically, Bitcoin rallies have been supported by robust liquidity flows, with the $5 billion increase in stablecoin market cap serving as a crucial indicator of market health.

At present, liquidity remains constrained—still below its 30-day moving average. The absence of sufficient liquidity to facilitate large-scale transactions means that Bitcoin’s price will likely struggle to move in a meaningful direction, particularly when faced with resistance levels.

Technical Resistance at $91K–$92K: A Psychological Ceiling

Bitcoin is currently facing a critical technical resistance zone between $91,000 and $92,000. This range aligns with the on-chain realized price level, which represents the average price at which Bitcoin has last moved on-chain. When the Bitcoin price approaches this realized price, it often encounters significant resistance.

This resistance zone is crucial because it is more than just a technical level; it is also a psychological barrier. Traders and investors often pay close attention to realized prices as a point of market equilibrium.

When price approaches this threshold during bearish conditions, it tends to act as a ceiling, restricting further upward movement.

For Bitcoin to continue its upward trajectory, it must break through this resistance zone with strong buying volume. However, given the current market environment—characterized by weak demand, low whale accumulation, and stagnant ETF inflows—this resistance will likely hold until a more significant shift in sentiment occurs.

Broader Market Sentiment: Caution Over Euphoria

Market sentiment, while difficult to quantify, plays a crucial role in shaping the direction of Bitcoin's price. In the current environment, sentiment remains cautious.

While Bitcoin has avoided a sharp correction, it also hasn’t experienced the exuberant buying activity typically seen during bull markets. Instead, there is a notable air of uncertainty, with investors hesitant to commit large sums of capital.

This cautious sentiment is reflective of the broader economic conditions, where investors are still digesting regulatory developments, macroeconomic factors, and the evolving role of digital assets in the global financial system.

While some may remain optimistic about Bitcoin’s long-term prospects, the lack of aggressive buying signals a market that is unsure of its next major move.

Final Thoughts

CryptoQuant’s data paints a picture of a market in waiting—not one on the cusp of a bullish resurgence. Bitcoin has stabilized, but the undercurrents of weak demand, stalled whale accumulation, and stagnant institutional participation signal that the conditions for a sustained rally are not yet in place.

For Bitcoin to truly reclaim its bullish momentum, it will need to see a significant uptick in demand and momentum, fueled by both retail and institutional capital.

Until then, the market will likely remain stuck in a consolidation phase, with Bitcoin testing key resistance levels but unable to break free.

While the fundamentals remain solid in the long term, the short-term outlook is decidedly cautious. Investors will need to stay vigilant, keeping an eye on both on-chain metrics and broader market sentiment, as Bitcoin waits for the catalyst that will either fuel its next bull run or prolong the current stagnation.

FAQ

Q: What is CryptoQuant’s current outlook on Bitcoin’s price?
A: CryptoQuant’s analysis indicates that while Bitcoin’s price momentum has stabilized, the underlying demand remains weak.

Q: Has institutional interest in Bitcoin increased recently?
A: No, institutional participation, particularly through U.S.-based Bitcoin ETFs, has flatlined since late March. Net purchases have fluctuated between -5,000 BTC and +3,000 BTC per day, significantly lower than the 8,000+ BTC daily inflows during Bitcoin’s bullish period in late 2024.

Q: How are large Bitcoin holders (whales) behaving?
A: Large Bitcoin holders, or whales, have started reducing their positions. Their accumulation rate has dropped from 2.7% in late March to just 0.4%, indicating a more cautious approach and less confidence in Bitcoin’s immediate future.

Q: Is Bitcoin’s liquidity growing at the same pace as it did during previous rallies?
A: No, Bitcoin’s liquidity growth is lagging behind historical levels.

Q: What is the current technical resistance for Bitcoin?
A: Bitcoin is facing resistance around the $91,000–$92,000 range. This zone corresponds with the on-chain realized price and is acting as a psychological ceiling, preventing further upward movement under the current market conditions.

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