Bitcoin selling pressure is declining, as shown by over-the-counter (OTC) desk balances and on-chain activities of short-term holders.
The revelation of a lower-than-expected inflation rate in the US has caused the price of bitcoin (BTC) to soar past $60,000 and into the $67,000 range.
The most recent CryptoQuant weekly analysis states that a recent decrease in selling pressure has also contributed to Bitcoin’s surge. However, the demand for cryptocurrency has yet to increase.
Bitcoin Selling Pressure Drops
The balances on over-the-counter (OTC) markets and the on-chain activities of short-term holders indicate a decline in BTC selling pressure.
Since late April, the BTC balance on OTC desks has steadied, suggesting a decrease in the amount of bitcoin market players provide. When the asset reached an all-time high of $73,000 on March 10, the balance on OTC marketplaces increased by 60,000 BTC; however, it has been stagnant since late last month.
Similarly, short-term Bitcoin holders’ profit margins are currently low or negative due to large margins that led to intense selling pressure in the first part of March. Traders are already dealing with unrealized losses on the contracts since they have used up all their profits in 2024. This has historically occurred at the same time as a local price bottom.
The low profitability of miners provides evidence that the market may have bottomed. According to analysts at CryptoQuant, Bitcoin miners are currently receiving meager wages, and their profitability has fallen to levels not seen since March 2020—a few days following the COVID market crisis. Meager miner profitability has historically been linked to market bottoms.
The Demand Has Not Increased
However, after a month of slowing down, the surge in demand for Bitcoin seemed to be stabilizing. The rise sees increased demand from these market participants in permanent holders’ and major investors’ BTC balances.
However, for the market to maintain the most recent price climb, there would need to be a further increase in BTC demand. The spot Bitcoin exchange-traded fund (ETF) market and other Bitcoin investment funds may be the source of the demand.
The crypto market requires a fresh wave of spot Bitcoin ETF purchases, according to analysts at CryptoQuant, to revive demand growth. These products are in increasing demand already, as seen by the funds’ cumulative inflows of over $560 million during the last two trading days.
Furthermore, stablecoin liquidity is increasing, indicating that BTC may rise.