Bitcoin hovers around a critical price level, showing limited downside potential but a lack of bullish momentum, according to Cryptoquant researchers. The leading cryptocurrency is currently trading between $65,000 and $66,000, a significant onchain realized price that could either provide support or indicate a correction.
Although the overall outlook for bitcoin is positive, several indicators suggest a decline in demand. Traders are not increasing their holdings, and even large holders, known as whales, are only showing modest growth in demand, as indicated by cryptoquant.com's metrics. Furthermore, the liquidity of stablecoins has slowed down, hindering potential price rallies.
Cryptoquant's latest market analysis emphasizes the stagnation in bitcoin demand. Traders have been reducing their holdings since late May when the price approached $70,000. Additionally, the growth in demand from large bitcoin holders has slowed down compared to earlier this year. The data also reveals that stablecoin liquidity, which is crucial for market rallies, is experiencing its slowest growth since November 2023, further contributing to the subdued market conditions.
Demand from U.S. investors, a significant driving force for bitcoin and ethereum prices, remains low. The Coinbase premium, which indicates U.S. investor demand, has been negative since late May. Without a substantial increase in demand from U.S. investors, the market is unlikely to experience a strong bullish movement, according to Cryptoquant's market analysts.
In conclusion, although the downside potential for bitcoin seems limited, there is a lack of bullish momentum required for a significant upward trend. This viewpoint aligns with the outlook shared by QCP Capital earlier this week. The ongoing low demand from traders, whales, and U.S. investors, combined with sluggish stablecoin liquidity, suggests that the market may continue in its current state in the near future, according to Cryptoquant's research team.
What are your thoughts on the analysis conducted by Cryptoquant researchers? Feel free to share your opinions and thoughts on this matter in the comments section below.