Why Bitcoin Prices are Correcting due to Falling Demand?
Given the bearish pressure affecting Bitcoin’s price drop, Julio Moreno, a crypto researcher in charge of research at CryptoQuant, has insight into how demand was dropping, hence affecting the ongoing correction in Bitcoin prices.
Analyzing BTC Apparent Demand
The notion of apparent demand is valuable in assessing market dynamics. Put in simple terms, demand for Bitcoin can be estimated from the dormant supply, which is idle BTC that hasn’t been used or transacted for quite a long while.
Bitcoin Demand and Its Impact on Price
Data from CryptoQuant has shown that more than 1 million BTC from the 1-year dormant supply has transferred in the last 30 days. These outflows indicate a decrease in demand for Bitcoins and, therefore can imply that long-term holders are now liquidating their positions. This demonstrates a bearish view towards the value of the sector leading cryptocurrency, which forced prices into a recent correction. Supply seems to be further increased in the market by the apparent release of the cryptocurrency by long-term Bitcoin holders, heightening the pressure towards lower prices. This could push price declines further as low buying pressures prevails. Since the launch of the U.S. Spot Bitcoin ETF in Q1 2024, there has been a fragile demand recorded for Bitcoin, according to CryptoQuant’s week-on-chain report. Prices have remained relatively low, which could become a precursor for another upcoming bull market again.
Bitcoin Price Snapshot
Bitcoin is currently trading at $60,790 USD, with a 1.6% weekly decline. CoinGecko data suggests the drop was more like 6% over the same time frame.
