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While the bitcoin market is experiencing a period of turbulence, with global demand at a standstill, a group of investors remains optimistic. These are the long-term holders. They continue to accumulate the iconic crypto and show confidence that contrasts with the general market sentiment.
The Weakness of Bitcoin Demand
For several months, bitcoin demand has shown increasingly evident signs of weakness. According to a recent analysis by Cryptoquant, this decline has been exacerbated in recent weeks. The situation is worsened by the notable slowdown in the growth of the portfolios of large investors, often called “whales.” In March, these portfolios grew by 6%, but this has recently dropped to only 1%.
The decline in demand is also visible in the US Bitcoin ETF market. The daily bitcoin purchases by these ETFs have dropped from 12,500 BTC in March to only 1,300 BTC last week, according to Cryptoquant data. At the same time, the premium on Coinbase, an indicator of demand on this platform, has dropped from 0.25% to 0.01%, further highlighting the current market weakness.
The effects of this weakened demand are directly reflected in the price of bitcoin, which has dropped from around $70,000 to $49,000 in recent weeks. Currently, the price of the crypto asset has recovered slightly, fluctuating around the $61,000 mark. However, this significant drop underscores the need for a demand recovery to hope for a sustainable market recovery.
A Striking Contrast: The Accumulation of BTC by Long-Term Holders
Despite these alarming signals, some elements suggest a possible market resilience. According to Cryptoquant’s report, long-term holders, or “holders,” continue to accumulate bitcoin at record levels. Indeed, every month, an additional 391,000 BTC are added to their portfolios. This incessant accumulation could strengthen the market’s foundation in the long term, offering some support to a weakened price.
In addition, the total capitalization of stablecoins has reached a new peak of $165 billion. This significant increase in liquidity could indicate that investors are preparing to reinvest in cryptocurrencies, suggesting a potential future rebound. The conjunction of these factors shows that, despite weakened overall demand, robust fundamental elements remain, offering hope for a recovery.
In summary, the bitcoin market currently presents a striking contrast. On one hand, immediate demand is weakening, pressured by weak market signals and eroded confidence. On the other hand, the commitment of long-term holders and the rise of stablecoins paint a more optimistic picture for the future. These opposing dynamics show the importance of not limiting oneself to appearances but considering the underlying trends that could transform the market.
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Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.