Bitcoin [BTC] continued to trade above the $80k mark. Corporate BTC holdings have increased in Q1 2026, and the sentiment around the leading crypto is improving. The Unified Sentiment Index showed greed for the first time since January 2026.
At the same time, the network activity has dropped to two-year lows, reported AMBCrypto. The current rally was showing signs of structural weakness, which made the rally more fragile.
It can be argued that institutional investors have changed the traditional rules around BTC. Reduced activity might not be the hammer blow to the bulls that it might have been a few years back.
Bitcoin institutionalization in the making?
In a post on CryptoQuant, analyst Darkfost compared the Bitcoin Exchange Inflows using spent UTXOs from 2016 and 2026. A decade ago, the inflow volumes were relatively constant. Price moves tended to be less correlated with traditional markets.
In 2026, the volume trends have shifted significantly. The total inflow volumes are slightly lower. Each weekend also saw a sizeable reduction in trading volume, a stark difference from 2016.
This reflected the increasingly important role institutional investors play in dictating Bitcoin price trends. The transition toward rising institutional capital influence began in 2018 and became more pronounced in 2019 and 2020.
This suggested a structural shift for BTC in recent years.
The big-picture argument here is that the lens of historical cycles we view Bitcoin under might have also changed due to institutional entities and their influence on the market.
The realized cap tracks the total value of an asset at the price each coin was last moved at on-chain, multiplied by the circulating supply.
Tracking the 30-day change in the BTC realized cap can work as a proxy for spot capital flows into and out of the market, according to analyst Axel Adler Jr.
The metric has been negative for 75 days. On the 6th of May, the metric climbed to +0.22%. This was technically an exit from negative territory, but it does not indicate demand recovery.
The metric has to remain above +1% for 7-10 days to indicate notable capital inflows in the spot market.
Until this happens, the transition to positive territory more closely resembles decreased selling than active, sustained demand that can take Bitcoin on a long-term uptrend.
Final Summary
- The uptrend since March was accompanied by reduced network activity, but this might not mean structural weakness.
- The recent transition to positive territory was not big enough to indicate a move toward a bull market growth phase.