Bitcoin's Price Plunge: A Tale of Absorbed Supply and HODLers' Resolve
The Bitcoin market has been in a bearish state, and a key reason might surprise you.
Julio Moreno, the research head at CryptoQuant, offers a unique perspective on the recent Bitcoin price drop. He shifts the focus from long-term holders' spending to the demand side of the equation. This is where it gets interesting: Moreno suggests that the issue isn't the selling activity of these long-term 'HODLers' (those holding coins for over 155 days), but rather the lack of demand to absorb the supply they release at higher prices.
But what does this mean exactly?
Moreno introduces the 'Apparent Demand' indicator, which tracks the difference between Bitcoin's daily production (what miners issue) and changes in its long-term inventory (supply inactive for over a year). When this demand turns negative, it implies that there isn't enough interest to buy Bitcoin at higher prices, potentially leading to price drops.
And here's where it gets controversial...
The 30-day Apparent Demand for Bitcoin has been negative recently, indicating a short-term lack of demand. This could be a significant factor in the asset's decline. However, the 1-year Apparent Demand tells a different story, showing some growth, albeit slow. This mixed picture leaves room for debate: Is the market simply experiencing a temporary correction, or is this the start of a more prolonged bearish trend?
A Historical Perspective:
The last time Bitcoin's 30-day Apparent Demand was consistently negative was during the first half of the year, a bearish period. Could history be repeating itself? Or will demand recover and push prices upwards again?
As of now, Bitcoin hovers around $103,900, a 9% drop over the past week. This recent dip has the crypto community buzzing, with many wondering if this is a buying opportunity or a sign of further decline.
What's your take on this? Do you think the market will bounce back, or are we in for a longer bearish ride? Share your thoughts and let's spark a conversation!
