Bitcoin's Appetite Is on a Diet: Demand Still Can't Keep Up With New Supply 🥄

Bitcoin's spot ETF flows have posted three consecutive positive trading days beginning July 2, but the streak does little to offset what has been an overwhelmingly negative picture since mid-May, a period that has included only three days of net inflows overall. Analysts tracking the asset say the contrast between calmer early-July price action and the turmoil of early June has masked a deeper issue: a dramatic drop in demand.

According to CryptoQuant contributor Darkfost, the apparent demand metric, calculated as the difference between new issuance and the supply of Bitcoin that has been inactive for over a year, has remained negative throughout 2026. The figure sits at -75,000 BTC after a modest three-week improvement, still far above the year's low of -275,000 BTC but well below levels consistent with sustained accumulation by long-term holders.

Separately, analyst Novaque Research pointed to an estimated leverage ratio of 0.241 across all exchanges, computed as the ratio of open interest to exchange reserves and sitting just above the 100-day moving average. Funding rates have also flipped positive after several months largely in negative territory, a combination Novaque described as evidence of a major leverage reset, though one in which speculative excesses have not been fully trimmed to enable clean accumulation.

The combination of weak apparent demand and rising leverage has left market participants wary. AMBCrypto reported that the June sell-off triggered excessive long liquidations as attempts to catch a market bottom resulted in heavy losses, and that even as long-term holders continued to accumulate, ongoing macroeconomic developments left open the question of whether a final capitulation phase has yet occurred.