Bitcoin’s apparent demand has fallen into negative territory for the first time in 2025, with traders stepping back from riskier assets amid growing macroeconomic concerns.
The decline coincides with persistent outflows from Bitcoin exchange-traded funds (ETFs), as the crypto market reacts to geopolitical uncertainty and the Federal Reserve’s policy stance.
Bitcoin demand plunges to lowest level in 2025
Apparent demand for Bitcoin, a key metric tracked by CryptoQuant, dropped to -142 on March 13. This marks the lowest level since September 2024, when demand turned positive and peaked in December. However, as market uncertainty intensified, Bitcoin demand steadily declined before turning negative this month.
The downturn reflects a broader shift in investor sentiment. Fears of a prolonged trade war, inflationary pressures, and a risk-off approach to high-volatility assets have pushed traders toward safe havens such as cash and government bonds.
Despite softer-than-expected U.S. Consumer Price Index (CPI) data on March 12, Bitcoin failed to rally, signaling deeper market concerns.
Crypto ETFs have witnessed four consecutive weeks of capital flight, with CoinShares reporting $4.75 billion in total outflows over the past month.
Bitcoin investment vehicles alone accounted for $756 million in outflows so far in March, reinforcing weak demand across institutional channels.
ETF sell-offs fuel market volatility
Bitcoin ETFs recorded another $143 million in outflows on March 14, following a brief inflow of $13 million the previous day. Since the start of March, investors have withdrawn $1.7 billion from Bitcoin-related funds, highlighting persistent selling pressure.
The White House Crypto Summit on March 7 failed to reassure investors, with post-election realities weighing on sentiment. Since Donald Trump’s inauguration on Jan. 20, the total crypto market cap—excluding Bitcoin and Ether—has plunged by 27%, from over $1.1 trillion to $795 billion.
Since hitting a peak of over $109,000, BTC has dropped more than 22% to its current level of $84,674. The asset remains below its 200-day exponential moving average (EMA), a key technical level that has historically acted as support.
Bullish divergence hints at potential reversal
Despite the bearish sentiment, some analysts see signs of a recovery. Crypto trader Rekt Capital highlighted a potential bullish divergence forming on Bitcoin’s relative strength index (RSI). This pattern suggests waning seller dominance, where RSI forms higher lows while price action trends lower.
“Promising early-stage signs of a Bullish Divergence developing,” Rekt Capital wrote on X, emphasizing that reclaiming the $84,000 level could set the stage for further upside.
Keith Alan, co-founder of Material Indicators, echoed this view. He pointed to Bitcoin’s struggle to reclaim the 200-day simple moving average (SMA), currently at $86,800.
“BTC is poised to make another run at reclaiming the 200-Day MA,” Alan noted, adding that a sustained close above this level is crucial for bullish momentum.
Geopolitical risks and Fed stance to dictate next moves
The escalating U.S.-Canada trade war and continued economic uncertainty have dampened investor risk appetite. While lower inflation readings could support a dovish Fed policy, traders remain cautious about the broader impact of trade tensions.
A potential rate pause by the Federal Reserve next week could provide a much-needed boost for Bitcoin.
Polymarket prediction markets currently price in a 99% probability of a rate hold, while the odds of a Russia-Ukraine ceasefire have risen to 80%. If macroeconomic pressures ease, Bitcoin could see renewed inflows and a stabilization in demand.
