The price of Bitcoin (BTC) rose beyond the $60,000 level to the $67,000 region on news of a lower-than-expected inflation rate in the United States.
According to the latest weekly CryptoQuant a reportBitcoin's recent rally has also been sustained by the recent decline in selling pressure. However, the demand for cryptocurrency has not yet increased.
Low Bitcoin selling pressure
The decrease in Bitcoin selling pressure can be seen in the on-chain activity of short holders and balances held in over-the-counter (OTC) desks.
The balance of Bitcoin on OTC desks has been stable since late April, indicating a declining supply of Bitcoin from market participants. The balance on OTC desks began to rise by 60,000 BTC on March 10 when the asset reached an all-time high of $73,000; However, it has remained steady since late last month.
Likewise, profit margins for short-term Bitcoin holders are currently at low or negative levels after high margins led to high selling pressure in early March. Since they have exhausted all accumulated profits in 2024, traders now face unrealized position losses. Historically, this has coincided with lower prices locally.
The possibility that the market will bottom is evidenced by the low profitability of miners. CryptoQuant analysts said that bitcoin miners are being paid very low wages at the moment, and their profitability has fallen to levels last seen since March 2020, just days after the market collapse due to the coronavirus. Historically, very low miner profitability has been associated with price bottoms.
Demand has not increased yet
On the other hand, Bitcoin demand growth appears to be stabilizing after a month of slowdown. The rise in BTC balances of frequent holders and large investors indicates high demand from these market participants.
However, demand for Bitcoin will need to rise further to enable the market to sustain the recent price rise. The demand could come from the Bitcoin exchange-traded fund (ETF) market and other Bitcoin investment funds.
According to CryptoQuant analysts, the cryptocurrency market needs a new wave of spot purchases of Bitcoin ETFs to update demand growth. It seems that the demand for these products is already on the rise thanks to the money Vision Total inflows are more than $560 million in the last two trading days.
In addition, stablecoin liquidity is growing, indicating a potential move to the upside for BTC.
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