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Bitcoin Demand is Drying Up, What Does This Mean?
The latest report from CryptoQuant reveals a concerning trend in the cryptocurrency market – demand for bitcoin is drying up. As tensions escalate in the Middle East, the price of BTC has been struggling to recover from its recent losses.
According to CryptoQuant’s data, bitcoin spot demand growth has slowed down significantly, with apparent demand growth falling to 118,000 BTC over the last month. This marks a stark contrast to the previous growth rate recorded on May 27, when it stood at an impressive 228,000 BTC.
More alarmingly, the expansion of whale balances has stalled, plummeting from a high of 3.9% monthly growth as of May 27 to a meager 1.7% in recent times. The decline is so drastic that even spot ETFs have halved their purchases. In fact, daily BTC purchases from these entities now stand at a mere 3,300, down sharply from the April 23 peak of 9,700.
Furthermore, CryptoQuant’s data suggests that new participants entering the market are not generating enough demand to offset the decline in other segments of the market. Meanwhile, short-term holders have shed approximately 0.8 million BTC, representing a significant loss of over 15% from their previous holdings as of May 27.
So what does this mean for the future of bitcoin? Unfortunately, it’s not looking good. For a sustained rally to occur, whales and ETFs need to increase their demand once more, while new investors must also buy BTC from existing holders to bolster short-term balances. If this trend continues, we could see the price of bitcoin plummet below $100,000 and potentially even fall into the support zone near $92,000.
If that isn’t enough, CryptoQuant’s Traders’ On-chain Realized Price (ROP) suggests that the current price level is already under pressure. This metric often serves as a key indicator of market sentiment, and its downward trajectory signals a decline in demand.
Source: cryptopotato.com
