Bitcoin ETF Inflows Collapse 88% — But On-Chain Activity Is Heating Up

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Bitcoin is sending two different signals at once. Traditional finance demand cooled sharply last week, while the network itself became more active.

According to Glassnode’s latest Market Pulse, weekly U.S. spot Bitcoin ETF netflows fell 87.7% to $208.1 million. ETF trading volume also dropped 11.8% to $10.8 billion. That looks weak on the surface, especially after the stronger institutional inflows seen a week earlier.

But the on-chain picture moved in the opposite direction. Daily active addresses climbed 6.1% to 675,800, entity-adjusted transfer volume rose 2.4% to $6.7 billion, and total fee volume increased 7.3%.

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ETF demand cooled, but Bitcoin activity did not

The biggest change came from regulated investment products. Glassnode’s weekly ETF netflow metric dropped from an unusually strong reading back into its normal historical range. At the same time, the ETF MVRV ratio rose to 1.5, above its high band.

That suggests the average ETF holder is sitting on a relatively large unrealized profit. Importantly, Glassnode did not interpret the move as a broad institutional exit. Netflows remained positive — they were simply much smaller than the previous week.

Meanwhile, spot market behavior improved. Spot cumulative volume delta moved from negative $102.8 million to positive $33.2 million, a 132.3% swing. That means aggressive spot buyers regained the upper hand after a week in which sellers had dominated.

Futures leverage also eased. Open interest fell 3.8% from $38.0 billion to $36.6 billion, while perpetual CVD recovered toward neutral. The combination matters because price held near the upper part of its recent range even as some leveraged positions were unwound.

Fresh capital is still entering the network

The more interesting part of the report may be the capital-flow data. Bitcoin’s hot-capital share rose to 19.5%, while the short-term-holder to long-term-holder supply ratio increased to 14.2%.

Those figures point to a larger share of coins moving into the hands of newer, more price-sensitive market participants. That can support momentum, but it can also make the market more reactive if price breaks sharply in either direction.

Profit-taking is already elevated. Glassnode estimates 73.6% of circulating supply is in profit, while its realized profit-to-loss ratio rose to 1.3. In other words, investors are taking more profits than losses, but the market has so far absorbed that selling.

The takeaway is more nuanced than “ETF demand is falling.” TradFi inflows cooled aggressively, but spot buying improved, network activity increased and fresh capital continued entering Bitcoin. The next move may depend on whether those on-chain flows can compensate if ETF demand stays muted for another week.

Source: Glassnode BTC Market Pulse, Week 41.