The institutional offer under bitcoin It’s running on fumes.
US bitcoin spot ETFs have absorbed a net 4,500 BTC since the start of the year, an unusually low figure given that commodities were the structural buyer driving the 2025 rally, according to Swissblock data shared on Tuesday.
March and April produced steady accumulation that helped lift bitcoin from lows near $65,000, while May has taken a turn in the opposite direction with just three days left in the month.
“After a strong buildup in March and April, May has returned to distribution,” Swissblock said in its post. “The risk index is now moving into high-risk territory while ETF flows are simultaneously deteriorating. That tells us that ETF spot demand is no longer absorbing selling pressure effectively.”
The reversal is important because previous bitcoin rallies required the buying of ETFs to liquidate the supply coming from miners, long-term holders and short-term traders making profits.
When that supply decreases, the supply has to find a different buyer or the price falls to a level where buyers appear. 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 in Asian time on Tuesday, down 2.6% from last month and near the end of its May range. The cryptocurrency had briefly traded above $82,000 in early May before the release of the Producer Price Index and the subsequent bout of macro stress sent 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 pointing in the same direction.
Apparent demand, which measures how much bitcoin the market is absorbing relative to new supply, has returned to its weakest level since December, as CoinDesk reported on Tuesday.
CryptoOnchain saw $1.74 billion in US spot ETF withdrawals over the past two weeks, along with retail traders adding 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 turnaround.
ETF purchases have declined previously during this cycle without causing deeper declines. Meanwhile, global stock markets are at record highs, and FXPro’s Alex Kuptsikevich said bitcoin’s 50-day and 200-day moving averages are on track to intersect in the coming weeks, a setup known as a golden cross that is generally interpreted as bullish.
But ETF demand is the channel that brought in the new money. If that channel remains in distribution, the structural case for the rally that began in April will begin to look weaker.
