Bitcoin institutional demand lags - Can adoption sustain BTC's recovery? - AMBCrypto
Bitcoin’s network activity is improving even as its price remains below its previous highs. In 2024, the network activity moved in tandem with the price action as Bitcoin [BTC] moved toward the $100,000 zone. . . .
Bitcoin’s network activity is improving even as its price remains below its previous highs. In 2024, the network activity moved in tandem with the price action as Bitcoin [BTC] moved toward the $100,000 zone. However, in 2025, this relationship began to diverge when the network activity plummeted rapidly. Source: CryptoQuantThe divergence suggests Bitcoin adoption continues strengthening beneath the surface, even as investors remain cautious about the price outlook. Recently, however, the trend has reversed. The metric’s index rose from nearly 3. 2k to nearly 3. 8k as Bitcoin lost its upward momentum. That shift matters because growing usage is appearing before a major price recovery. That said, caution is still warranted. According to CryptoQuant, most of the increases have been as a result of smaller transaction volumes compared to institutional inflows. Fund demand weakens despite improving network activityWhile there are indicators that network activity is recovering, fund demand continues to be headed in the exact opposite direction. Recently, the Fund Market Premium fell into negative territory asBitcoinmoved down toward $63. 1k. This indicates that institutions and investors are still unwilling to pay more than Net Asset Value (NAV) for exposure. Earlier in the cycle, the Premium was close to neutral while Bitcoin was trading above $100k. Source: CryptoQuantHowever, fund demand gradually weakened, pushing the premium to approximately -6 during the recent selloff. Though the metric has recovered back up to approximately -0. 6, it remains in negative territory. Additionally, the 30 Day EMA is continuing to trend downward. This divergence implies that although adoption may be improving under the hood, stronger capital inflows are yet to provide support for a sustained recovery. Despite improvingnetwork activity andreduceddemand, thecurrentdolphinaccumulation adds anadditionallayer of caution. The addresseswithbalancesfrom100to1kBTChave beenaccumulatingmore Bitcoinover timethanthey did oneyearprior. However, therate at which these balances are increasingisdeclining steadily. Asaresultofthis decline, thenet increaseindolphin(addresses holding between 100and1k)balances has dropped significantly sincethebeginningof theyear. Source: CryptoQuantAlthough dolphin balances continue to be positive, thelossofmomentumwithinthissegmentof themarket indicates that some levelofinvestorconfidence has waned. Therefore,while there appears evidence ofconvictionamong investors based upon continued positive net increasesindolphinbalances relative to last year’s totals, theratesatwhich these increases haveoccurred indicate weakened conviction. Final SummaryBitcoin network usage continues improving, yet weaker fund demand suggests adoption is still outpacing capital inflows. Dolphin Holdings remains above last year’s levels, though slowing accumulation points to weaker conviction.