Bitcoin is getting hammered by selling pressure, and it’s not looking good. The demand for crypto’s queen has dropped, with on-chain data and holding behavior showing a bearish trend.
Weeks of dull price action have dragged down the sentiment, with analysts pointing out that the largest cryptocurrency is struggling to maintain its ground.
According to CryptoQuant, Bitcoin’s demand needs to rise before we see any real recovery or new highs.
They’ve got a demand indicator that shows the difference between the daily total Bitcoin block rewards and the daily change in the amount of Bitcoin that hasn’t moved in over a year.
This indicator is flashing red. Usually, miners sell their Bitcoin to cover operational costs, but when big holders start selling too, it’s a clear sign that demand is shrinking.
Billions of dollars in selling pressure
Billions of dollars worth of selling pressure have slammed the market, shattering the optimism that kicked off with the approval of spot Ethereum ETFs.
Back in January, when Bitcoin’s ETF trading began, and again in May with the halving event, some bullish folks were eyeing an $80,000 target by June. They thought these events would trigger a surge in demand. But nope, it didn’t happen.
Bitcoin is now down 20% since hitting those highs in May. Even though the ETFs have pulled in a solid $17.5 billion in net inflows since they launched, there’s skepticism.
Some are saying that this flow might not even be from bullish bets. It could just be traders trying to cash in on a carry trade. CryptoQuant has pointed out that the growth in the total holdings of large Bitcoin investors has slowed down.
They were growing at a monthly pace of 6% in March, but now it’s crawling at just 1%. This slowdown is happening alongside a drop in purchases from spot ETFs in the U.S.
They also noted that the average daily purchases from Bitcoin spot ETFs have plummeted.
Back in March, when Bitcoin was cruising above $70K, these ETFs were gobbling up 12.5K BTC daily. Last week, that number nosedived to just 1.3K BTC. That’s not exactly confidence-inspiring.
Long-term holders keep stacking, but it’s not enough
While short-term players are bailing, long-term holders are doing the opposite. These are the folks who’ve held onto their Bitcoin for more than six months, and they’re still stacking sats like crazy.
Their total balance just hit a record-high monthly rate of 391,000 BTC. That’s some serious conviction, but it’s not enough to keep the market afloat by itself.
Meanwhile, the total market cap of stablecoins has skyrocketed to a new record of $165 billion. Historically, this kind of liquidity surge in stablecoins has been a bullish signal for the crypto market.
It usually means there’s more money on the sidelines ready to jump in. But right now, it’s not translating into a higher Bitcoin price.
After a sharp drop, the carnage spread across altcoins and even the stock market. Bitcoin’s price has been dragging, struggling to stay above $60,000. We’re seeing outflows from some of the most important addresses, which is never a good sign.
These outflows have been categorized into different groups: high active addresses, frequent in-out flow addresses, addresses that frequently receive Bitcoin from centralized exchanges (CEXs), and new whales.
