Bitcoin Jumps 6.5%—But Can It Defy Gravity as Demand Cools?

BTC’s latest surge defies sluggish on-chain activity—traders bet institutional FOMO will override retail exhaustion. The ’greater fool’ theory gets a fresh coat of paint.

Market demand drops massively

There has been a notable demand drop for Bitcoin among a group of investors in the market.

According to CryptoQuant, Bitcoin’s demand in the spot market fell sharply by 146,000 BTC, resulting in a $13 billion decline in demand.

Source: CryptoQuant

However, compared to the previous month, this 30-day drop has been relatively minimal. As of the 27th of March, Bitcoin’s demand had fallen by more than twice the current figure, reaching a total drop of 311,000 BTC.

Analysis shows that Bitcoin’s demand momentum has weakened, dropping to its lowest level since October 2024, with a decline of 624,000 BTC.

Bitcoin’s demand momentum compares the buying activity of new investors to that of older ones. When fewer new investors purchase Bitcoin, it indicates a drop in demand for the asset. Summarily, it means less liquidity is flowing into the market.

Source: CryptoQuant

While new investors are not actively purchasing Bitcoin, some older investors are also reducing their exposure to the asset. A study of the U.S. spot Bitcoin exchange-traded fund market reflects this sentiment.

CryptoQuant reported that since March, U.S. spot ETFs have seen reduced activity, with net flows ranging between negative 5,000 and positive 3,000 BTC.

This marks a significant drop compared to the period between November and December, when 8,000 BTC were purchased daily on average.

Source: CryptoQuant

To put this into perspective, by this time in 2024, the market saw a net Flow of 208,000 BTC purchased, while in 2025, there has been a net flow of 10,000 BTC sold.

The decline in Bitcoin accumulation appears tied to reduced market liquidity, which is crucial for fueling a rally.

The USDT stablecoin supply, a key indicator of demand, has expanded by $2.9 billion over the past 60 days. However, this increase is insufficient to sustain a rally.

Historically, Bitcoin rallies occur when stablecoin market capitalization rises above $5 billion, exceeding its 30-day average—a condition not currently met.

Will liquidity addition change Bitcoin sentiment?

Notably, stablecoin demand is rising, as $1 billion in USDT was minted in the past 24 hours. This increase was not included in earlier reports, highlighting a renewed market interest.

A surge in stablecoin availability suggests growing interest from traders, who may now be more willing to buy crypto assets, with Bitcoin likely to benefit the most.

If more stablecoins are minted, it could indicate that investors are turning bullish. This may allow Bitcoin to continue its recent upward trend and potentially lead to a rally.