Bitcoin Holds Above $106,000, But Apparent Demand Cools To Negative Levels

Bitcoin has not yet lost its upward momentum as the flagship asset surges slowly toward the $108,000 resistance level. Since reclaiming $100,000, BTC has maintained its position above this level, showcasing its robust resilience during recent market whirlwinds. While BTC’s price displays bullish strength, buying pressure appears to be weakening.

Apparent Demand For Bitcoin Turns Negative

In a recent quick-take post on CryptoQuant, a market expert and author with the username Crazzyblockk has outlined a worrying trend among Bitcoin holders. Presently. Bitcoin’s Apparent Demand is in negative territory, indicating a weakening market and a critical demand deficit.

It is important to note that the Apparent Demand is a key on-chain metric that offers a lucid picture of BTC’s fundamental market balance by comparing supply and fresh demand from two sources. These include newly mined coins and previously inactive coins from Long-Term Holders that are now moving.

Since the weakening apparent demand coincides with ongoing price spikes, it could imply that the latest leg-up is operating on fragile ground. Such divergence suggests that the current upward trend is supported more by speculative momentum than strong, consistent buying interest.

Crazzyblockk highlighted that the combined supply pressure from newly produced coins and selling long-term holders has been too much for new buyer demand to absorb in recent days. According to the on-chain expert, this reinforces the idea that BTC’s apparent demand has fallen into negative territory again.

Considered a supply/demand imbalance and an underlying market weakness, the development generates an environment full of risk for a near-term price correction. Data shows that miners and profit-taking long-term holders are currently putting more coins onto the market than those being bought by new investors, which is a bearish signal.

What Makes This Negative Demand A Bearish Signal

After examining the negative apparent demand, Crazzyblockk considers this shift a bearish development for two crucial reasons. The first reason is that the divergence directly raises the quantity of “for sale” supply, which drives down the price. 

Secondly, this selling pressure from long-term holders, frequently referred to as “smart money,” often suggests the notion that the market might have hit a local top among these seasoned investors. As a result, the expert claims the market is in a vulnerable condition.

Should any price rally occur from current levels, Crazzyblockk believes it is likely to struggle to surpass this wave of available supply, and market support might not be as strong as expected. In the meantime, this anticipated trend is not yet a guarantee. However, this on-chain signal clearly indicates that a period of caution is necessary until demand begins to rise again.

Presently, Bitcoin is undergoing a significant rejection as the Stochastic Relative Strength Index (RSI) shows a death cross on the daily chart. Ali Martinez, a seasoned crypto analyst, stated that a move back to the $100,000 mark is likely unless there is a sustained close above $109,000.