Bitcoin’s weakness since the start of October has been attributed to spot ETF fund outflows and a slowdown in corporate buying.

On Oct. 19 (all times local), blockchain outlet Coinpost reported that Alex Thorn (알렉스 손), head of Galaxy Research, cited ETF outflows and slowing purchases by companies that hold bitcoin as a treasury asset as a factor behind bitcoin’s weakness.

Thorn’s basis is Galaxy Research’s proprietary indicator, “institutional absorption versus OG distribution.” The indicator measures monthly supply and demand by adding net ETF inflows and net purchases by treasury companies, then subtracting the volume of bitcoin that moved after being inactive on-chain for more than 5 years. OG refers to long-term holders who have held bitcoin since the early days. The tally of treasury companies also included Strategy, the largest holder.

As of Oct. 18, cumulative flows since the start of the year were tallied as net selling dominance of 127,319 BTC. That means the release of bitcoin that had been locked up for more than 5 years exceeded the amount absorbed by ETFs and companies. In March and April, large-scale buying by treasury companies supported flows, and April net flows recorded a plus of about 60,000 BTC.

The trend shifted after May. In June, ETF outflows of about 70,000 BTC occurred. As it overlapped with selling by long-term holders, the monthly net negative widened to about 100,000 BTC. Institutional buying nearly stopped in July. In August and September, ETF funds partly returned and turned slightly positive, but it was not enough to reverse the cumulative net selling dominance.

In October, it returned to negative territory again. ETFs switched to net outflows, and corporate buying remained limited. Galaxy Research’s tally showed October net flows were about minus 20,000 BTC as purchases failed to sufficiently absorb selling by long-term holders.

Price action also coincided with weakening flows. Bitcoin recovered to around $86,000 in early October, then fell to the low $80,000s. In a follow-up post, Thorn added that the ETF’s year-to-date net inflow amount remained “plus $355 million.” ETF flows are still net inflows on an annual basis, but recent trends suggest weaker support from supply and demand.

The tally also shows the players driving bitcoin’s price are not limited to institutional demand. Even if ETF and corporate buying continues, prices could come under pressure if selling by long-term holders grows larger. In particular, whether buying intensity by large holders such as Strategy and ETF fund flows recover again has remained a key variable for short-term supply and demand.

Meanwhile, ETFs overall have maintained net inflows since the start of the year, but outflows and inflows have alternated on a monthly basis. In this situation, if corporate buying also slows, there could be fewer buyers to absorb selling by long-term holders. The market is expected to watch both the direction of ETF flows and whether treasury companies resume buying for the time being.