The institutional offer under Bitcoin works with steam.
US spot Bitcoin ETFs have absorbed a net 4,500 BTC since the start of the year, an unusually low number given that the products were the structural buyer that fueled the 2025 rally, according to Swissblock data shared on Tuesday.
March and April produced a steady buildup that helped push bitcoin back up to near $65,000, while May reversed course with just three days left in the month.
“After a strong accumulation in March and April, the month of May returned to distribution,” Swissblock said in its message. “The Risk Index is now moving into high-risk territory while ETF flows are simultaneously deteriorating. This tells us that ETF spot demand is no longer absorbing selling pressure effectively.”
This reversal is significant because previous Bitcoin rallies required the purchase of ETFs to eliminate supply from miners, long-term holders and short-term traders who were taking profits.
When this supply decreases, the supply must find a different buyer, otherwise the price drops to a level where buyers come forward. Swissblock’s argument is that the risk index, which measures structural selling pressure against absorption, can continue to rise as long as the ETF channel remains in distribution.
Bitcoin traded at $75,808 during Asian hours on Tuesday, down 2.6% over the past month and near the bottom of its May range. The cryptocurrency had briefly traded above $82,000 earlier in May before the printing of the Producer Price Index and the subsequent series of macroeconomic stresses pushed it back below $80,000. ETH, XRP and Solana were all in the red, with Zcash leading the decline with a 9% drop on the day.
The Swissblock reading is the latest in a series of on-chain data moving in the same direction.
Apparent demand, which measures the amount of bitcoin absorbed by the market relative to new supply, fell to its lowest level since December, as CoinDesk reported on Tuesday.
CryptoOnchain noted $1.74 billion in U.S. spot ETF withdrawals over the past two weeks as retail traders added leverage in anticipation of a reversal, a combination that has historically preceded strong liquidation cascades when the market moves against the crowd.
What the data doesn’t yet tell traders is whether this is a pause or a turning point.
ETF purchases have already declined during this cycle without leading to larger declines. Meanwhile, global stock markets are hitting record highs, and FXPro’s Alex Kuptsikevich said Bitcoin’s 50- and 200-day moving averages are poised to cross in the coming weeks, a pattern known as the golden cross that is generally interpreted as bullish.
But demand for ETFs is the channel that brought in the new capital. If this channel remains in the distribution, the structural arguments in favor of the rally that began in April begin to appear thinner.
