CryptoQuant CEO Ki Young Ju warned investors, noting that the recent surge in the bitcoin market is not driven by high spot demand.
Bitcoin Needs Spot Demand for Growth!
In a post on his X account, Ki Young Ju stated that the bitcoin market is currently largely driven by the futures market, while the evident spot demand for bitcoin on the blockchain remains negative.
Ju wrote that open interest is currently increasing, but spot demand on the blockchain remains at a net selling level and has not yet fully recovered.
This means that prices are rising only due to capital inflow into the futures market, and the spot market is not providing the same support for real growth.
In this context, Ju claims that a recovery in spot demand is necessary for sustainable BTC growth.
"...Sustainable growth requires both spot and futures demand. As we saw in April, growth driven by futures demand tends to weaken without support from spot demand."
A Drop in the $USDT Rate May Positively Impact Bitcoin!
Furthermore, analysts at the blockchain analytics company CryptoQuant reported a $4 billion drop in the market capitalization of $USDT, the largest stablecoin, over the past two months. According to the analysts, this indicates one of the sharpest declines in $USDT in recent years and suggests that many investors are leaving the cryptocurrency market.
At first glance, this picture can be interpreted as investors exiting the market and a weakening inflow of new capital.
However, CryptoQuant analysts note that such large-scale reductions in the $USDT rate have historically been observed mainly in the late stages of bear markets. They point out that the sharpest reductions in $USDT coincided not with periods of increased selling pressure, but rather with periods when that pressure was nearing its end.
In this context, the analysts believe that although the reduction in $USDT may be a negative liquidity signal for bitcoin in the short term, historically it can also be viewed as an early sign that the current sell-off may be nearing its end.
*This is not investment advice.
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