CryptoQuant Unpacks Bitcoin's Bearish Turn: Low Demand Cited for Price Dip
Recent analysis from CryptoQuant's Head of Research, Julio Moreno, sheds light on the driving force behind Bitcoin's current bearish trend. Instead of focusing on traditional long-term holder distribution, Moreno highlights a critical on-chain metric: "Apparent Demand." This alternative perspective suggests that the asset's recent decline is primarily due to insufficient demand at elevated price points.
On-Chain Insights: The Apparent Demand Metric
Moreno's methodology diverges from standard analysis by examining the "other side of the trade." He scrutinizes whether there is enough demand to absorb the supply being sold by long-term holders at higher prices. Long-term holders, defined as investors retaining their Bitcoin for over 155 days, are often seen as the high-conviction "HODLers." However, recent data indicates a significant selling trend from this cohort over the past month. The "Apparent Demand" metric itself offers a unique lens, comparing Bitcoin's daily production (new coins from miners) with changes in its long-term inventory (supply inactive for over a year). When this metric turns negative, particularly over a 30-day period, it signals that the demand needed to absorb the available supply at higher prices is low. CryptoQuant's findings reveal that this 30-day Apparent Demand has recently turned red, echoing a similar bearish phase observed earlier in the year and directly correlating with Bitcoin's current price depreciation.
Short-term Weakness vs. Long-term Outlook
While the short-term (30-day) Apparent Demand paints a concerning picture, the 1-year view offers a slightly different narrative. This longer-term metric has shown some growth recently, albeit at a slow pace, remaining below its 90-day Simple Moving Average (SMA). This suggests that while there might be underlying, sustained demand over a broader horizon, its momentum is weak and not strong enough to counteract the immediate selling pressure. At the time of this report, Bitcoin is trading around $103,900, having seen a 9% decrease over the last seven days. The prevailing question remains whether demand will rebound to absorb the circulating supply or if the cryptocurrency is set for a continued slide, mirroring the extended negative demand phase experienced during the first half of the year. The lack of robust demand at higher price levels appears to be the fundamental reason behind Bitcoin's current struggle.
