Cryptoquant Report Reveals Decline in Global Demand for Bitcoin

A recent report from Cryptoquant has brought mixed signals to light in the Bitcoin market, highlighting a worrying drop in global demand for the cryptocurrency.

Despite a momentary surge driven by comments from Federal Reserve Chairman Jerome Powell that sparked a spike in demand in the United States, the overall trend remains negative, with global demand for Bitcoin weakening over the past few weeks.

Last week, after Powell hinted at the possibility of lower interest rates, the price of Bitcoin surged more than 6% to $65,000. This surge was especially notable in the United States, where renewed investor interest was evident in the rising price premium on Coinbase, a leading cryptocurrency trading platform.

Cryptoquant’s report highlighted that Bitcoin has started flowing back into North American exchanges, a move historically associated with price increases.

Bitcoin

Cryptoquant researchers have observed that the Inter-exchange Flow Pulse (IFP) indicator, which monitors the flow of Bitcoin between exchanges, is on an upward trend. This suggests that the cryptocurrency is being moved to Coinbase in response to increased demand in the US. “An upward trend in the IFP is usually associated with higher Bitcoin prices,” the analysts stated in the report.

However, despite this rally, Cryptoquant’s report emphasizes that global demand for Bitcoin remains weak. Since April, when Bitcoin was trading at $70,000, demand has been steadily falling, contributing to price stagnation.

While the perpetual futures market saw open interest rise by nearly 10,000 BTC following Powell’s statement, broader demand growth turned negative, suggesting the market is struggling to sustain further price increases.

Another critical point raised by Cryptoquant is the low level of profit-taking during the recent rally. According to the report, profit-taking totaled only $536 million, a significantly lower amount compared to previous market peaks.

This indicates that while Bitcoin’s price has temporarily surged, the market may not be at an inflection point for a sustained rally.

Cryptoquant experts warn that without a reversal in the downward trend in global demand, the Bitcoin market may continue to face challenges in maintaining price growth.

Follow Todaysgist on

YOU MAY HAVE MISSED:

Crypto Prices Today June 3 2024: Majority of Coins Parked in the Red Zone