Recent data from Cryptoquant researchers indicate that bitcoin demand growth continues to show signs of weakness. Despite this, the report notes that long-term holders have been accumulating bitcoin at unprecedented levels, providing some resilience to the market.
Report Shows Bitcoin Demand Craters Amid Weak Market Signals
Bitcoin demand has seen a significant decline since early April, according to data analyzed by cryptoquant.com. The research indicates that apparent demand for bitcoin dipped into negative territory this month, with the total holdings of large bitcoin investors, commonly referred to as “whales,” experiencing a sharp slowdown in growth.
Specifically, the monthly pace of growth in whale holdings has decreased from 6% in March to just 1% in recent weeks. This weakening demand has been reflected in bitcoin’s price, which has dropped from around $70,000 to $49,000, highlighting the need for a resurgence in demand for a sustainable price recovery.
Cryptoquant’s findings also point to a notable decline in bitcoin purchases by spot BTC exchange-traded funds (ETFs) in the United States. Daily purchases have dropped from 12,500 BTC in March to an average of just 1,300 BTC last week. This reduction in ETF activity coincides with a lower price premium for bitcoin on Coinbase, which has fallen from 0.25% earlier this year to a mere 0.01% currently.
The researchers explain that declining premiums further underscore the weakening demand within the U.S. market, suggesting that without a recovery in ETF purchases, the overall demand for bitcoin may remain subdued. However, not all metrics signal a bearish outlook. Cryptoquant researchers note that long-term holders have continued to accumulate bitcoin at a record-high monthly rate of 391,000 BTC.
Additionally, the total market capitalization of stablecoins has surged to a new peak of $165 billion, indicating growing liquidity within the crypto market. These factors suggest that while short-term demand may be weak, the underlying fundamentals, driven by long-term holders and increased stablecoin liquidity, could provide a foundation for future growth.
What do you think Cryptoquant’s research report? Share your thoughts and opinions about this subject in the comments section below.
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