Bitcoin’s Demand Drops, But Long-Term Holders Remain Bullish
A recent report from the on-chain analytics platform Cryptoquant has revealed that the demand for Bitcoin (BTC) has experienced a significant decrease, entering negative territory. This decline in demand has been ongoing since April, with apparent demand plummeting from a 30-day growth of 496,000 BTC to a negative growth of 25,000 BTC in August.
The decrease in demand has also had a substantial impact on the price of Bitcoin, with the cryptocurrency dropping from its all-time high of $73,000 in March to as low as $49,000 in early August. As a result, Bitcoin has been trading in the $50,000 range as demand remains low.
According to Cryptoquant, this decline in demand can be attributed to the US Spot Bitcoin ETFs, with average daily purchases dropping from 12,500 BTC in March to 1,300 BTC last week. The lower premium for BTC on Coinbase further reflects the decrease in spot demand in the US.
Despite the declining demand for Bitcoin, long-term holders have maintained a bullish outlook and have continued to accumulate BTC at unprecedented levels, with their holdings growing at a record-high monthly rate of 391,000 BTC. These long-term holders have seized the opportunity presented by lower prices to add more BTC to their positions, with 75% of BTC’s supply held by them remaining untouched for over six months despite declining prices.
Overall, while the demand for Bitcoin has seen a decline, the unwavering conviction among long-term holders is a positive sign for the flagship cryptocurrency. It will be essential to monitor the potential impact of the US Spot Bitcoin ETFs on Bitcoin’s demand growth and price recovery, as highlighted by Cryptoquant.
As of the time of writing, Bitcoin is trading at around $59,400, down over 2% in the last 24 hours, according to data from CoinMarketCap. With the market dynamics evolving, it will be intriguing to observe how Bitcoin’s demand and price trajectory develop in the coming months.
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