Bitcoin Price Faces Downtrend as Demand Struggles to Match Supply: CryptoQuant

TLDR

• CryptoQuant’s Julio Moreno links Bitcoin price drop to weak demand
• The market does not absorb long-term holders’ selling pressure
• The Apparent Demand indicator shows a negative short-term demand for Bitcoin
• 1-year Apparent Demand growth remains slow and below key averages
• Bitcoin’s price struggles without sufficient market absorption of supply

Julio Moreno, CryptoQuant’s head of research, has highlighted a drop in Bitcoin (BTC) price due to low demand. In a post on X, he pointed to a lack of buying interest at higher levels as a key factor. According to him, this could explain why the asset has been experiencing a decline in value.

Low Demand for Bitcoin at Higher Prices

Bitcoin’s market has recently shown a lack of demand to absorb supply from long-term holders. Julio Moreno focused on the apparent demand for Bitcoin, especially at higher price levels. He stated that when long-term holders sell their assets, the market must show enough demand to absorb the supply.

Moreno emphasized that the demand is crucial to determining whether Bitcoin price can rise or sustain itself. “Since a few weeks ago, the answer is no, and that is why we see prices declining,” he said. The head of CryptoQuant argues that the absence of strong demand has contributed to the recent decline in Bitcoin’s value.

Over the past month, long-term Bitcoin holders have been selling a substantial portion of their holdings. While analysts watch this action, Moreno believes the focus should be on demand to absorb this supply at higher prices. If demand is weak, the Bitcoin price can fall, even when holders sell in significant quantities.

Apparent Demand Insights and Bitcoin Price Trends

The Apparent Demand indicator compares Bitcoin’s production and changes in long-term supply and demand. This indicator helps gauge whether there is enough market absorption to maintain or push the Bitcoin price higher. It tracks production, which refers to the amount of BTC miners release every day.

Moreno utilized the Apparent Demand indicator to demonstrate the recent weakness in short-term demand for Bitcoin. The 30-day Apparent Demand has been negative, reflecting a lack of immediate buying interest. “Is there enough demand to absorb the supply at higher prices?” Moreno questioned in his post.

The 1-year Apparent Demand, however, has been improving slightly, albeit at a slow pace. While this suggests some growth, it remains below the 90-day simple moving average. Bitcoin’s price will likely remain under pressure until demand picks up and absorbs the current supply.

BTC Price Outlook Amid Low Demand

CryptoQuant’s research suggests that Bitcoin’s current price decline is tied to insufficient demand. Although long-term holders are still selling, the market is not absorbing the supply fast enough. This imbalance may persistently affect the Bitcoin price unless demand improves substantially.

Recent trends show that Bitcoin has been under a bearish phase, similar to earlier this year. Whether demand will increase and reverse the trend remains uncertain. The Apparent Demand for the coin will continue to play a key role in determining its price direction.

The outlook for Bitcoin’s price remains cautious. As long as demand continues to underperform, the Bitcoin price will likely face pressure. CryptoQuant’s analysis underscores the need for stronger market participation to stabilize the asset’s value.

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