Bitcoin Demand Drops Into Negative Territory Amid Price Slump

A
recent

research
report

by
the

onchain
analytics
platform
Cryptoquant

noted
that
the
demand
for
Bitcoin
(BTC)
has
dropped
into
negative
territory.
The
platform
also
highlighted
the

unwavering
conviction

among
long-term
holders,
which
is
undoubtedly
a
positive
for
the
flagship
crypto. 

Bitcoin’s
Demand
On
The
Decline

Cryptoquant
stated
that
the
demand
for
the

flagship
crypto

has
declined
since
April
and
has
dropped
to
negative
territory
since
the
start
of
the
month.
The
report
further
revealed
that
BTC’s
apparent
demand
has
fallen
from
a
30-day
growth
of
496,000
BTC
in
April
to
a
negative
growth
of
25,000
BTC
this
month. 

Cryptoquant
explained
that
the
apparent
demand
refers
to
the
difference
between
the
daily
total
Bitcoin
block
subsidy
and
the
daily
change
in

BTC’s
unmoved
supply

for
a
year
or
longer.
This
key
indicator
signals
a
weakness
in
BTC’s
demand
growth.
This
weak
demand
for
Bitcoin
is
also
evident
in
how
the
increase
in
the
total
holdings
for
large
Bitcoin
investors
has
slowed
from
a
monthly
pace
of
6%
in
March
to
1%.

The
declining
demand
for
the
flagship
crypto
has
consequently
affected
its
price,
seeing
how
BTC
has
dropped
from
its

all-time
high
(ATH)

of
$73,000
in
March
to
as
low
as
$49,000
in
early
August.
The
crypto
has
also
continued
to
range
in
the
$50,000
range
as
demand
remains
low. 

Cryptoquant
suggested
that
this
slowdown
in
BTC’s
demand
might
be
thanks
to
the

US
Spot
Bitcoin
ETFs.
The
average
daily
purchases
from
these
funds
have
declined
from
12,500
BTC
in
March
to
1,300
BTC
last
week.
This
slow
spot
demand
in
the
US
also
coincides
with
the
lower
premium
for
BTC
on
Coinbase.
The
Bitcoin
premium
on
Coinbase
had
risen
to
0.25%
after
these
funds
launched
in
January. 

Cryptoquant
remarked
that
a
spike
in
Bitcoin’s
demand
growth,
primarily
through
the
Spot
Bitcoin
ETFs,
is
essential
for
a
BTC
price
recovery
and
the
possibility
of
reaching
new
highs
in
this
market
cycle. 

Long-Term
Holders
Remain
Bullish
On
Bitcoin

Despite
the
declining
demand
for
Bitcoin,

long-term
holders

remain
bullish
and
have
taken
advantage
of
lower
prices
to
add
more
BTC
to
their
positions.
According
to
Cryptoquant,
these
BTC
holders
have
continued

accumulating
BTC

at
“unprecedented
levels,”
with
their
holdings
growing
at
a
record-high
monthly
rate
of
391,000
BTC. 

Interestingly,
demand
from
these

long-term
holders

is
growing
faster
than
in
the
first
quarter
of
the
year
when
BTC
was
trading
around
its
ATH,
further
highlighting
how
this
category
of
investors
is
taking
‘buying
the
dip’
seriously.
NewsBTC

recently
reported

that
75%
of
BTC’s
supply,
held
by
these
long-term
holders,
hasn’t
been
moved
in
over
six
months
despite
declining
prices. 

At
the
time
of
writing,
Bitcoin
is
trading
at
around
$59,400,
down
over
2%
in
the
last
24
hours,
according
to

data

from
CoinMarketCap. 

Featured
image
created
with
Dall.E,
chart
from
Tradingview.com