Bitcoin has been holding above key support levels, but CryptoQuant analyst Alex Adler Jr. says no fresh capital is flowing into Bitcoin. At the same time, ETF investors are reducing their exposure, while more than half of Bitcoin’s circulating supply is now being held at a loss.
With demand weakening and ETF flows turning negative, a critical $58,400 support zone is a key support level to watch.
According to CryptoQuant analyst Alex Adler Jr., the biggest concern is not Bitcoin’s price but the lack of new capital entering the network.
The Bitcoin New Investor Flow indicator, which tracks fresh demand through changes in Bitcoin’s realised capitalisation, has dropped to roughly -$1.2 billion. This means that more money is leaving than entering.
During previous bull markets, the same metric showed large positive inflows as new investors rushed into Bitcoin. Today, those blue inflow spikes have disappeared and been replaced by red bars, signalling weak demand.
Adler suggests that, “The current move is mostly being supported by participants who are already in the market.”
According to Axel, the key level to watch now is $58,400, which represents Bitcoin’s Adjusted Realised Price.
Historically, this line has acted as strong support during corrections. As long as Bitcoin remains above $58,400, the current decline can still be viewed as a healthy support test.
However, if that level breaks, Adler believes the next major support sits near $46,700, a February 2024 low.
The slowdown in fresh demand can be clearly seen through the drop in the spot Bitcoin ETF market.
Over the past month, U.S. spot Bitcoin ETFs have recorded roughly $6.3 billion in net outflows, indicating that many institutional investors, including BlackRock, have reduced their exposure.
Even more than half of Bitcoin’s Supply is now held at a loss. Market data shows that 10.5 million BTC, or over 50% of Bitcoin’s circulating supply, is now being held at a loss. Similar conditions appeared near major market bottoms in 2011, 2018, and 2022.
Together, ETF flows and on-chain data paint a similar picture: new buyers remain cautious.
Adding to the analysis, popular trader Michael van de Poppe sees a similar short-term setup.
After Bitcoin was rejected near $66,000, he warned that the market could revisit lows below $57,500 before a stronger recovery begins. However, he believes such a move could create a bullish divergence and form a stronger foundation for the next rally.
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