According to a recent research report from the onchain analytics platform Cryptoquant, the demand for Bitcoin (BTC) has entered negative territory. However, the report also highlighted the strong commitment among long-term holders, which is a positive sign for the leading cryptocurrency.
Decrease in Bitcoin Demand
Cryptoquant revealed that the demand for the mainstream cryptocurrency has been decreasing since April and has dropped into negative territory since the beginning of this month. The report indicated that BTC’s apparent demand has shifted from a 30-day growth of 496,000 BTC in April to a negative growth of 25,000 BTC in the current month.
According to Cryptoquant, the apparent demand represents the difference between the daily total Bitcoin block subsidy and the daily change in BTC’s unmoved supply for a year or more. This critical indicator suggests a weakness in BTC’s demand growth, visible in the slowdown of total holdings for major Bitcoin investors, dropping from a monthly growth rate of 6% in March to 1%.
The decline in demand for the leading cryptocurrency has impacted its price, with BTC falling from its all-time high (ATH) of $73,000 in March to as low as $49,000 in early August. The cryptocurrency has been stuck in the $50,000 range due to the low demand.
Cryptoquant suggested that a boost in Bitcoin’s demand growth, especially through the Spot Bitcoin ETFs, is crucial for a potential BTC price recovery and the chance of achieving new highs in the current market cycle.
Positive Outlook from Long-Term Holders
Despite the dwindling demand for Bitcoin, long-term holders remain optimistic and have seized the opportunity of lower prices to increase their BTC holdings. Cryptoquant reported that these BTC holders have been accumulating the cryptocurrency at unprecedented levels, with their holdings expanding at a record-breaking monthly rate of 391,000 BTC.
Interestingly, the demand from these long-term holders is growing faster than in the first quarter of the year when BTC was hovering near its ATH, indicating their serious commitment to ‘buying the dip’. Recent reports have shown that 75% of BTC’s supply, held by these long-term holders, has remained untouched for over six months despite the price decline.
Currently, Bitcoin is trading around $59,400, experiencing a more than 2% drop in the last 24 hours, as per data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com
