The past two months’ market correction might be easing as Bitcoin begins to show encouraging on-chain metrics. A recent analysis by the analytics platform CryptoQuant suggests a slow but steady improvement in the demand for Bitcoin. The platform’s data indicates that the decrease in Bitcoin’s spot demand is becoming less severe, with a decline in asset demand slowing and an expansion in crypto liquidity.
### Demand for Bitcoin Showing Signs of Recovery
Over the last month, Bitcoin has seen a notable decline in demand by 146,000 BTC, a stark improvement from the 311,000 BTC drop observed on March 27. This indicates that while the demand for Bitcoin continues to decrease, it does so at a diminished pace. Despite this, the momentum behind the demand for Bitcoin has reached its lowest point since October 2024, with a sharp fall to 642,000 BTC. This reflects a slowing pace in BTC accumulation by large investors, the slowest monthly rate since February, with their holdings slightly reducing over the past week.
The interest in Bitcoin among U.S. spot exchange-traded fund (ETF) markets remains low, although there was a significant inflow of over $912 million on April 22. The daily flows into these funds have varied significantly in comparison with the substantial inflows observed during November and December when Bitcoin’s value surged. Notably, U.S. spot Bitcoin ETFs have experienced a net sale of 10,000 BTC so far this year, starkly contrasting with the net purchase of 208,000 BTC around this time in 2024. CryptoQuant underscores the necessity of sustained positive growth in Bitcoin demand, demand momentum, and purchases from U.S. spot ETFs for a potential increase in prices.
### Market Still Favors the Bears
The analytics platform also pointed out that a sustainable price rally typically occurs when the market cap of stablecoins, exemplified by Tether (USDT), expands by more than $5 billion, staying above its 30-day moving average. Currently, the growth of USDT’s market cap by $2.9 billion in the last sixty days falls short of providing the necessary crypto market liquidity for a continuous rally. Despite a 6.5% increase in Bitcoin’s price over 24 hours, trading above $94,000, the Bull Score Index remains under 40, suggesting that the bears still hold control over the market.
Tweetable Takeaway: Bitcoin’s demand shows signs of recovery with positive on-chain metrics despite a bear-dominated market. A sustained rally requires continued growth in demand and liquidity. #Bitcoin #CryptoLiquidity #MarketTrends
