Demand for Bitcoin has been in decline since April, approaching negative territory in the past few weeks.

According to an August 20 report from data analytics firm CryptoQuant, demand for the digital asset has plummeted, from a 30-day growth of 496,000 Bitcoins in April to a current negative growth of 25,000 BTC.

The analysis shows that apparent demand is determined by calculating the difference between the total daily Bitcoin block subsidy and the daily change in the number of Bitcoins that has remained constant for at least a year.

Unsurprisingly, the drop in demand has had a negative impact on cryptocurrency prices. Bitcoin prices fell from around $70,000 in April to a low of around $51,000 in early August. Despite the correction, the cryptocurrency is still up 33% year-to-date.

This decline in demand is largely due to a drop in purchases of spot ETFs in the United States, from 12,000 BTC in March to an average of 1,300 BTC between August 11 and 17.

Daily change in total Bitcoin holdings | Source: CryptoQuant

The BTC premium on Coinbase reached 0.25% in early 2024, shortly after the ETFs were launched. Since then, the premium has gradually decreased, now at 0.01%, further supporting the view that demand for BTC in the United States is declining.

“A resumption of buying momentum from spot ETFs is key to boosting overall demand for Bitcoin, and could lead to a corresponding price rally,” the analysis report said.

Holders continue to accumulate

Despite the bearish trend from institutions, long-term BTC holders have taken advantage of lower prices to buy in at an unprecedented rate.

The total balance of long-term holders—addresses that have never spent or sold Bitcoin—is growing at a record monthly pace, reaching 391,000 BTC. “Demand from long-term holders is growing faster than in Q1 2024, when Bitcoin’s price exceeded $70,000,” the report states.

Meanwhile, “whales” – addresses holding between 1,000 and 10,000 BTC – have reduced their total holdings. According to the analysis:

“The 30-day percentage growth in whale holdings has dropped from 6% in February – the fastest rate of increase since February 2019 – to just 1% currently.” Monthly growth rates exceeding 3% in whale holdings are often closely correlated with increases in Bitcoin prices.

Conclude

Although the demand for Bitcoin has been decreasing since April, as reported by CryptoQuant, this could be a potential opportunity for long-term investors. As Bitcoin’s price corrects, long-term holders have taken advantage to increase their holdings, showing strong confidence in the future value of the coin. The correction in the market is not only a challenge but also opens the door for a stronger recovery and growth in the coming period. As demand from institutions and ETFs recovers, Bitcoin could see a new rally, cementing its position in the cryptocurrency ecosystem.

Source: https://tapchibitcoin.io/nhu-cau-ve-bitcoin-giam-manh-ke-tu-thang-4.html