CryptoQuant Head Reveals Reason Behind Bearish Bitcoin Trend
Recent analysis by CryptoQuant's head of research, Julio Moreno, highlights the declining demand to absorb Bitcoin at higher prices, which may explain the cryptocurrency's price drop. The Bitcoin Apparent Demand metric, which tracks differences between production and long-term inventory, has turned negative on a 30-day basis, signaling low short-term demand. While the 1-year Apparent Demand shows mild growth, it remains below the 90-day SMA, suggesting weak recovery. The lack of sufficient demand has contributed to Bitcoin's recent price decline, which stands at $103,900, down 9% in the last week.
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Recent Bitcoin Demand Insights from CryptoQuant
CryptoQuant’s research head, Julio Moreno, has recently highlighted the low demand to absorb Bitcoin at higher prices, which might explain the asset’s recent decline. In a post on X, Moreno analyzed BTC market dynamics from an alternative perspective, stating: “Instead of looking at Bitcoin long-term holder distribution/spending, I like to look at the other side of the trade.”
Long-Term Bitcoin Holders and Their Impact
Long-term holders are defined as BTC investors who have held their coins for more than 155 days, often termed the high-conviction "HODLers". Distribution or spending activity from these holders is frequently monitored by on-chain analysts. According to Maartunn, another CryptoQuant analyst, long-term holders have engaged in significant selling over the past month, raising concerns for the market.
Focus on Apparent Demand Over Distribution
However, Moreno’s focus diverges as he evaluates whether there is enough demand to absorb supply rather than just monitoring long-term holders’ activities. The Apparent Demand metric becomes crucial here, as it measures the difference between BTC production by miners and the changes in long-term holders’ inventory.
- Production: Daily issuance of BTC by miners.
- Inventory: Supply that has remained inactive for over one year.
Current Trends in Bitcoin Apparent Demand
Moreno’s analysis revealed that Bitcoin Apparent Demand on the 30-day time frame has turned red recently, indicating negative short-term demand. He posed the question: “Is there enough demand to absorb the supply at higher prices?” His answer: “Since a few weeks ago, the answer is no, and that is why we see prices declining.”
In contrast, the 1-year Apparent Demand shows some recent growth, but its value still lags behind the 90-day Simple Moving Average (SMA) and its pace of increase remains slow.
Historical Comparison and Market Implications
The last extended phase of negative 30-day Apparent Demand was observed during the bearish market conditions in the first half of the year. Will history repeat itself, or could demand for Bitcoin recover soon? This remains uncertain and will be crucial to watch in the upcoming weeks.
Current Bitcoin Price Trends
At the time of writing, Bitcoin is valued at $103,900, marking a 9% decline in the past seven days. This significant drop further reflects the ongoing challenges in short-term demand for the cryptocurrency.