Bearish signals for Bitcoin: institutional demand down

By Davide Grammatica

With the Bitcoin futures market showing a decline in institutional demand, the risk of a decline for BTC becomes more concrete

Bitcoin's problems

Bitcoin continues to float just below $100k but, as time goes by, the risk of new short-term corrections becomes more and more concrete.

There are various reasons for this, but one of the main ones seems to be the Bitcoin and Ethereum futures market, which in recent days has seen a sharp drop in institutional demand.

As reported by JPMorgan analysts in a recent report, the products have in fact approached “backwardation”, a situation in which the spot price is higher than the future prices implicit in the corresponding futures contracts.

This would be a symptom of weak demand from institutional investors, who have been driving the sector upwards until now. It’s no secret, after all, that ETFs have played a key role in BTC’s race to its ATHs.

All the more reason why the loss of this institutional push could represent a problem for the health of the crypto ecosystem. If only in the short term, at a time when it is difficult to find further bullish factors (as was the case with the recent US elections).

BTC awaits new stimuli

It is precisely the lack of these factors that is pushing investors to realize their profits, creating a vicious circle that could weigh on BTC for a long time. News is expected from the new US administration, but analysts seem to agree that regulatory “turnarounds” are unlikely in the first half of 2025.

Traders and investors remain in “wait-and-see” mode, and it seems inevitable that the markets will face a new phase of selling pressure.

Despite everything, the demand for BTC and ETH ETFs, although slowing down, remains positive, and as long as this is the case, the bullish cycle cannot be said to be over. On the contrary, it is likely that the ETFs will be the very thing that signals the beginning of a bearish cycle with high outflows.

#Bitcoin ETF demand has slowed but stays net positive.

This bull cycle would last until significant ETF outflows emerge. Prolonged net negative demand would signal the start of a bear cycle.

Demand and supply are all that matter—everything else is just noise. https://t.co/Zw3TqYliVP pic.twitter.com/MfbVT0W8cJ

— Ki Young Ju (@ki_young_ju) February 20, 2025