Bitcoin Demand Shows Early Signs of Recovery: CryptoQuant Research Head

• Bitcoin demand may be poised for a resurgence, based on recent on-chain data.
• The apparent demand metric for Bitcoin is starting to show positive growth.
• This surge in demand could indicate the early stages of a significant recovery in Bitcoin’s market performance.

Recent on-chain data suggest that Bitcoin demand is seeing early signs of revival, potentially marking the beginning of a bullish phase.

Bitcoin Demand Indicator Shows Positive Growth

Julio Moreno, Head of Research at CryptoQuant, has shared insights on an important demand indicator for Bitcoin known as “Apparent Demand.” This metric considers the daily block subsidy alongside the daily net change in the one-year inactive supply of Bitcoin, offering a comprehensive view of the cryptocurrency’s current demand.

The Mechanics of Apparent Demand

The daily block subsidy represents the amount miners earn in rewards each day, effectively introducing new Bitcoin into circulation. Simultaneously, the daily net change in the one-year inactive supply tracks movements in Bitcoin that have been dormant for at least a year. A positive change implies more Bitcoin entering long-term holding, while a negative change indicates a decrease in dormant supply.

Recent Trends and Market Implications

According to the latest chart shared by Moreno, the 30-day sum for Bitcoin’s Apparent Demand has recently flipped positive. This upward shift has also broken above its 30-day simple moving average (SMA), suggesting an early phase of recovery. Historically, high values in the Apparent Demand metric have coincided with significant market rallies, including the surge to a new all-time high (ATH) earlier this year.

Potential Bullish Signals

The indicator’s return to positive territory, although modest, could herald a bullish trend for Bitcoin. Moreno emphasizes the importance of monitoring this metric over the next few weeks to better understand the potential for a sustained recovery. The slight increase in demand aligns with Bitcoin’s recent price rally, which saw the cryptocurrency rise from $54,000 to nearly $68,000.

Conclusion

In summary, the observed uptick in Bitcoin’s Apparent Demand metric may signal the early stages of a recovery in the market. While the metric’s current low levels suggest a cautious optimism, historical data indicates that sustained growth in this indicator could pave the way for significant price increases. Investors and market observers should keep a close eye on developing trends to gauge the potential long-term impact on Bitcoin’s valuation.