Bitcoin selling pressure eases as demand stabilizes – CryptoQuant

The price of bitcoin (BTC) has surged past the $60,000 level into the $67,000 zone on news of a lower-than-expected inflation rate in the United States.

According to CryptoQuant’s latest weekly report, bitcoin’s latest rally has also been sustained by a recent decline in selling pressure. However, the demand for the cryptocurrency has not yet increased.

Bitcoin selling pressure eases

The drop in BTC selling pressure can be seen in the on-chain activity of short-term holders and over-the-counter (OTC) table balances.

The balance of BTC on OTC tables has stabilized since the end of April, indicating less supply of bitcoins from market participants. The balance on OTC tables began to increase by 60,000 BTC on March 10, when the asset reached an all-time high of $73,000; however, it has been flat since late last month.

Similarly, profit margins for short-term BTC holders are currently at low or negative levels following high margins that led to heavy selling pressure in early March. Having exhausted all accumulated profits in 2024, traders now face unrealized losses on positions. Historically, this has coincided with a local price minimum.

The possibility that the market has bottomed out is corroborated by the low profitability of miners. Analysts at CryptoQuant said Bitcoin miners are severely underpaid at the moment and their profitability has plummeted to levels last seen since March 2020, days after the COVID market crash . Historically, extremely low mining profitability has been associated with low prices.

The demand is yet to be collected

On the other hand, Bitcoin demand growth appears to be stabilizing after a month of slowdown. The increase in BTC balances of permanent holders and large investors indicates increased demand from these market participants.

However, demand for BTC should increase further to allow the market to sustain the latest price rally. Demand could come from the Bitcoin exchange-traded fund (ETF) market and other Bitcoin investment funds.

According to CryptoQuant analysts, the crypto market needs a new wave of spot purchases of Bitcoin ETFs to fuel demand growth. Demand for these products appears to be increasing already, with the funds seeing total inflows of more than $560 million over the past two trading days.

Additionally, stablecoin liquidity growth is increasing, indicating a potential upside move for BTC.

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