CryptoQuant's Research Head Unveils Bearish Bitcoin Trend: Low Demand at Higher Prices
The head of research at CryptoQuant has shed light on a potential reason behind Bitcoin's recent decline. Julio Moreno, in a recent post on X, analyzed the BTC market dynamics, focusing on a unique aspect of demand.
Moreno's Perspective: A Different Angle
Instead of monitoring long-term Bitcoin holder distribution and spending, Moreno takes a different approach. He examines the demand side of the trade, specifically targeting long-term holders who have been in possession of their coins for over 155 days. These investors are known for their high conviction, often referred to as 'HODLers', and their actions are closely watched by on-chain analysts.
A recent post by CryptoQuant community analyst Maartunn revealed that these long-term holders have been actively selling during the past month. However, Moreno's analysis takes it a step further.
Apparent Demand: Absorbing Supply
The key metric Moreno uses is the Apparent Demand, which compares the difference between Bitcoin's production and changes in its long-term inventory. Bitcoin's 'production' refers to the daily issuance by miners, while 'inventory' is the supply that has been inactive for over a year.
In a chart shared by Moreno, the Bitcoin Apparent Demand over the last few years is displayed in both 30-day and 1-year versions. The 30-day version has been consistently red, indicating a negative short-term demand for Bitcoin.
Moreno's Interpretation: Low Demand, Declining Prices
The analyst questions whether there is sufficient demand to absorb the supply at higher prices. The answer, according to Moreno, has been 'no' for the past few weeks, leading to the observed price decline. This negative short-term demand is a significant factor in the current bearish trend.
A Different Picture: 1-Year Apparent Demand
In contrast, the 1-year Apparent Demand has shown some growth, but at a slow pace. Its value remains below the 90-day simple moving average (SMA), suggesting a mixed outlook.
Historical Precedent: Bearish Phases
Moreno notes that the last time Bitcoin experienced an extended period of negative 30-day Apparent Demand was during the first half of the year's bearish phase. The question now is whether a similar pattern will repeat itself, or if demand will recover.
Current BTC Price: $103,900
At the time of writing, Bitcoin's price hovers around $103,900, indicating a 9% decline over the last seven days. This analysis provides a unique perspective on the market dynamics, inviting further discussion and interpretation.
