Bitcoin’s latest price recovery tested highs around $77,800 but encountered significant resistance due to mounting selling pressure from increased supply on exchanges and outflows from spot ETFs. Recent data reveals that more BTC coins entered exchanges than left, creating a supply imbalance that weighs on upward momentum.
Weekly net inflows to exchanges surged by approximately 18,000 BTC, indicating heightened availability for selling. At the same time, spot Bitcoin ETFs experienced nearly 16,000 BTC in net outflows, suggesting institutional investors have not provided enough demand to absorb excess supply. This combination generated nearly 34,000 BTC worth of local selling pressure, according to Bitcoin researcher Axel Adler Jr., who cautioned that a shift toward neutral or negative exchange netflows might be necessary for stronger price gains.
Additional metrics support the view of weakening speculative demand through traditional finance channels. Glassnode analysis shows spot ETF trading volumes have declined sharply—from above $50 billion to less than $20 billion daily—highlighting a retreat in activity that typically fuels price advances during rallies.
The rally’s near-term price action was also influenced by derivatives activity. Open interest in Bitcoin futures dropped from nearly 268,000 BTC to about 250,000 BTC during the rebound, pointing to significant short covering as bearish traders exited positions when BTC bounced back above $75,000. Funding rates cooled from recent highs but remained slightly positive, reducing the immediate risk of a long squeeze and indicating less crowding on leveraged long bets. Crypto analyst Rei Research underscored that daily funding rates have stayed negative for months, meaning short sellers continue to pay longs to hold.
Market sentiment gained temporary support from reports of a potential US-Iran peace deal, which eased broader risk concerns and bolstered appetite for risk assets. However, the persistent supply imbalance and fading institutional demand suggest that spot Bitcoin’s ability to sustain a rally above key levels remains uncertain.