Bitcoin Demand Drops 652K BTC but Capitulation Still Missing

Bitcoin may be nearing a valuation zone that has historically marked bear market bottoms, but on-chain data shows the market has not yet seen the seller exhaustion typical before a major recovery, according to a recent CryptoQuant analysis.

Bitcoin recently fell to a new bear market low of $59,000, putting it just 9% above its realized price of $53,600. The realized price reflects the average cost basis of all Bitcoin in circulation and has historically acted as a floor during major bear cycles. CryptoQuant noted that previous bear markets ended when Bitcoin traded near or slightly below this level, suggesting the market is entering a zone where long-term bottoms have formed before.

Bitcoin Demand Continues to Weaken

Despite attractive valuations, demand indicators remain weak. CryptoQuant reported that total Bitcoin demand fell by 652,000 BTC over the past week. This metric combines speculative futures activity with apparent spot demand and marks the largest demand contraction since January 2022.

Long-term spot demand is also deteriorating. CryptoQuant’s one-year apparent demand growth metric has turned negative, reaching its weakest level since February 2024. This suggests new buying activity is not strong enough to absorb available supply. While valuation metrics point to a potential floor, weak demand remains a major obstacle to confirming a market bottom.

ETF Demand Sees Record Decline

The report also highlighted a sharp reversal in spot Bitcoin ETF demand. ETF purchases are shrinking at the fastest pace since U.S. spot Bitcoin ETFs launched in January 2024. The 30-day growth rate of ETF demand has dropped to its lowest reading on record.

Institutional investors have been a key driver of Bitcoin’s current market cycle. The shift from accumulation to net selling by ETF investors has become a significant headwind. CryptoQuant described the current pace of ETF outflows as historically unusual, suggesting institutional demand has not only stalled but is actively declining.

Market Capitulation Has Not Happened Yet

Another important signal comes from realized losses. CryptoQuant said Bitcoin holders realized losses totaling 187,000 BTC over the past 30 days. While substantial, this remains well below levels from previous capitulation events.

For comparison, investors realized losses of roughly 400,000 BTC in February 2026 when Bitcoin first fell into the $60,000 range during the current bear market. Losses were even larger after the FTX collapse, surging to around 1.2 million BTC as Bitcoin established its cycle bottom. Major market bottoms typically form after panic selling reaches extreme levels and sellers become exhausted. Current data suggests that stage has not yet arrived.

Floor is Near, But Not Confirmed

CryptoQuant concluded that Bitcoin is approaching a valuation floor, but the firm does not see enough evidence to confirm a cycle bottom. Analysts believe a sustainable recovery will require stabilizing demand, a revival of ETF inflows, and a stronger capitulation signal from market participants.

Until then, investors should view the current price range as a historically attractive value zone rather than proof that Bitcoin’s bear market correction is over.

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