Bitcoin (BTC) has seen modest gains recently, with a 3.6% increase over the past month. However, the cryptocurrency is now showing signs of weakening demand, which could hint at an impending price correction.
Bitcoin's Apparent Demand Turns Negative
Analyst Crazzyblockk from CryptoQuant highlights that Bitcoin's new buyer demand is no longer sufficient to counterbalance the supply from miners and long-term holders (LTHs). This imbalance has pushed Bitcoin's Apparent Demand into negative territory, a bearish signal for the market.
When Apparent Demand is negative, it means more BTC is being sold than bought, increasing downward pressure on prices. Notably, LTHs selling often indicates that experienced investors believe the market has peaked, adding to the bearish outlook.
Market Vulnerabilities and Potential Scenarios
The analyst warns that the market is now in a high-risk state. Any price rallies may struggle against the wave of available supply, and support levels could be weaker than expected. Until demand shows clear recovery signs, caution is advised.
However, not all signals are negative. Another CryptoQuant analyst, Avocado_onchain, points out that the 30-day moving average of Bitcoin Binary Coin Days Destroyed (CDD) suggests healthy consolidation rather than a market top.
Silver Linings for Bitcoin
Despite the concerning demand metrics, easing geopolitical tensions and positive macroeconomic developments could still fuel a rally in risk-on assets, including Bitcoin. Additionally, the short-term holder (STH) floor price has risen sharply, now standing at $98,000, which may prevent a severe pullback.
At the time of writing, BTC is trading at $107,500, down 0.5% in the last 24 hours.
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