Recent research report By Cryptoquant onchain analytics platform noticed that the demand for Bitcoin (BTC) has fallen to negative values. The platform also highlighted unwavering conviction among long-term holders, which is undoubtedly an advantage of this flagship cryptocurrency.
Bitcoin Demand Drops
Cryptoquant stated that the demand for flagship crypto has been dwindling since April and has been in negative territory since the beginning of the month. The report further revealed that apparent demand for BTC fell from a 30-day gain of 496,000 BTC in April to a negative gain of 25,000 BTC this month.
Cryptoquant explained that apparent demand refers to the difference between the total daily Bitcoin block subsidy and the daily change BTC Supply Unchanged for a year or more. This key indicator signals a weakness in demand growth for BTC. This weakness in demand for Bitcoin is also evident in how the growth in the total holdings of huge Bitcoin investors has slowed from a monthly pace of 6% in March to 1%.
The decreasing demand for the flagship cryptocurrency has affected its price, as can be seen in the drop in the value of BTC All-time High (ATH) from $73,000 in March to just $49,000 in early August. The cryptocurrency continues to hover in the $50,000 range as demand remains low.
Cryptoquant suggested that the slowdown in BTC demand may be due to US ETFs on Bitcoin Spot. Average daily purchases from these funds have fallen from 12,500 BTC in March to 1,300 BTC last week. This faint spot demand in the US also coincides with a lower BTC premium on Coinbase. The bitcoin premium on Coinbase rose to 0.25% after these funds were launched in January.
Cryptoquant noted that an boost in demand for Bitcoin, mainly via the Spot Bitcoin ETF, is necessary for BTC price to rebound and potentially reach recent highs in this market cycle.
Long-term holders remain bullish on bitcoin
Despite the decreasing demand for Bitcoin, long term holders remain bullish and have taken advantage of the lower prices to add more BTC to their positions. According to Cryptoquant, these BTC holders have continued BTC accumulation “at an unprecedented level” and their holdings grew at a record rate of 391,000 BTC per month.
Interestingly, the demand from these long term holders is growing faster than in the first quarter of the year, when BTC was trading around its ATH, which further shows how this category of investors approachesBuying a dip‘seriously. NewsBTC recently reported that 75% of the BTC supply held by long-term holders has not been moved in over six months, despite falling prices.
At the time of writing, Bitcoin is trading at around $59,400, down more than 2% in the past 24 hours, according to data data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com
