Bitcoin (BTC) Faces Bearish Pressure with Weak Whale Demand and Liquidity Concerns

• The crypto market continues to languish, with Bitcoin (BTC) and other altcoins showing significant declines.
• Despite this downturn, analysts from CryptoQuant maintain that we are still in a bullish phase.
• An analysis reveals that Bitcoin prices have fallen below critical on-chain metrics, with no visible bullish trend.

This article explores the current downturn in the cryptocurrency market and delves into factors affecting Bitcoin’s trajectory.

Absence of Bullish Momentum in the Crypto Market

The evident lack of bullish momentum within the cryptocurrency market is reflected in the subdued growth of Bitcoin whale demand and dwindling stablecoin liquidity. The demand from large BTC holders is witnessing a modest monthly increase of 4.8%, a number that is higher than the 2.4% observed in late May but falls short of the 6%-10% growth rate recorded earlier this year when Bitcoin rallied to its all-time high.

Furthermore, on-chain data suggests that traders are not rekindling their interest in BTC, indicated by a decrease in their current holdings since Bitcoin’s price reached $70,000 in late May. Additionally, stablecoin liquidity, which is imperative for price rallies, has been on a downward trajectory. Tether’s (USDT) 60-day market capitalization growth has decelerated from $12.6 billion in late April to $3.7 billion, the slowest pace since November 2023. To stimulate price surges, an increase in stablecoin liquidity is crucial.

Potential Decline to $60,000 for BTC

The demand for Bitcoin and Ether (ETH) from U.S. investors remains at a historic low, a trend observed since May 20 with the BTC and Ethereum Coinbase Premiums below zero. U.S. investor demand is a pivotal determinant of BTC and ETH prices, and the current scenario isn’t promising.

This weak demand is also mirrored in spot Bitcoin exchange-traded funds (ETFs), which have experienced consistent outflows since June 13. These funds have collectively seen outflows exceeding $100 million each trading day over the past week.

“Indeed, the Bull-Bear Market Cycle indicator from CryptoQuant continues its downward trajectory, indicating that we are in a bull market with insufficient upward momentum. Currently, the index is at its lowest since October 2023 and below its 30-day moving average. A crossover past its 30-day moving average is necessary for the index to signal upward bullish momentum,” stated CryptoQuant.

Amidst these conditions, BTC is poised to decline further, potentially hitting the $60,000 mark since it has fallen below the traders’ on-chain realized price.

Conclusion

In summary, the cryptocurrency market is experiencing a significant lack of bullish momentum, exacerbated by weak demand from Bitcoin whales and low stablecoin liquidity. The prospect of Bitcoin falling to $60,000 remains plausible unless there is an increase in both whale demand and stablecoin inflows. Despite these challenges, analysts assert that the market remains in a bullish phase, although the need for renewed momentum is more crucial than ever.