Even though there isn’t much interest from big investors and exchange-traded funds (ETFs), Bitcoin still has a chance to increase in value in the next few weeks.
Past data shows that when there is high demand for Bitcoin, its price often goes up. However, right now, Bitcoin demand is low, and this trend suggests that a price increase might not happen soon.
According to a recent report from CryptoQuant, Bitcoin demand has dropped a lot since early April, when its price was around $70,000. This drop is evident from the slow daily growth of Bitcoin and the reduced increase in the number of large investors holding it.
Bitcoin Demand Metrics Still Weak
Bitcoin’s demand over the past 30 days has dropped a lot. In early April, the demand was very high at 496,000 BTC, but recently it has fallen to just 25,000 BTC. This high demand in April was the highest since January 2021. As demand slowed down, Bitcoin’s price fell to around $50,000.
Big Bitcoin holders, known as whales (who hold 1,000-10,000 BTC), have also decreased their holdings a lot. In February, these whales increased their holdings by 6%, the fastest rate since February 2019. Now, this rate has dropped to just 1%. Experts say that for Bitcoin prices to go up, whale holdings need to grow by more than 3% each month.
Furthermore, U.S. spot Bitcoin exchange-traded funds (ETFs) have been buying an average of 1,300 BTC daily recently. This is a big drop from the 12,500 BTC bought daily in March. When spot ETF purchases are high, it usually boosts overall Bitcoin demand and can lead to price increases.
Stablecoin Liquidity Is Growing
CryptoQuant reported that the demand for spot Bitcoin ETFs has slowed down, which is also reflected in the lower price difference of Bitcoin on Coinbase. Earlier this year, this price difference was 0.25% when Bitcoin was in high demand, especially from ETFs. However, it has dropped to 0.01% now, showing that interest in Bitcoin in the U.S. has decreased.
On a positive note, stablecoin liquidity is rising. Just a few weeks ago, this wasn’t happening. The total market value of stablecoins has reached a new record high of $165 billion.
Moreover, people who hold Bitcoin for the long term are buying more at record levels. This increase in stablecoin liquidity and buying by long-term holders usually leads to higher Bitcoin prices. So, there is a good chance that the market might see a price increase in the coming weeks.
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