Bitcoin's Price Surge Masks Weak Spot Demand, Raising Sustainability Concerns
Bitcoin's Rally Faces Sustainability Challenges
Bitcoin's recent price surge, reaching $91,700, has been met with caution as on-chain data reveals weak spot demand. According to CryptoQuant, Bitcoin's spot demand has slowed significantly, dropping by 146,000 BTC over the past 30 days. This negative trend raises questions about the sustainability of the current rally.
Declining Demand Momentum
The broader demand momentum for Bitcoin has also declined, falling by 642,000 BTC, the lowest level since October 2024. This metric, which tracks buying activity from new investors against existing holders, suggests reduced interest in the asset. Historical data indicates that sustained price appreciation typically requires both rising demand and strong momentum, both of which are currently lacking.
ETF Flows Reflect Limited Interest
Stable flows in U.S.-based spot Bitcoin ETFs, ranging between -5,000 and +3,000 BTC per day since late March, further highlight limited investor interest. While Bitcoin has shown strength in other metrics, the lack of demand growth compared to previous bull cycles has sparked concern among investors.
A Warning for Investors
CryptoQuant warns that without stabilization and growth in spot demand and broad demand momentum, Bitcoin's rally may not be sustainable. This could signal the end of the current bull run, as large investors await further rallies to maximize gains. The data underscores the importance of monitoring demand trends for insights into Bitcoin's future performance.
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