Bitcoin (BTC) Demand Momentum Remains In Negative Zone Despite Recent Gains

Despite Bitcoin (BTC) gaining notable traction over the past week – rising from approximately $85,000 on April 21 to nearly $95,000 today – the top cryptocurrency’s Demand Momentum remains

Despite Bitcoin (BTC) price hitting a new seven-week high today, the top cryptocurrency’s Demand Momentum remains deeply in the negative zone, highlighting a lack of urgency among investors.

According to a recent CryptoQuant Quicktake post by analyst Crazzyblockk, the 30-day Demand Momentum is still in negative territory at -483,860 BTC. The 30-day Simple Moving Average (SMA) of the same metric is also in the red, currently standing at -310,700 BTC.

For context, the 30-day Demand Momentum is calculated by subtracting the 30-day Long-Term Holder (LTH) Supply from the 30-day Short-Term Holder (STH) Supply. This metric essentially measures the net change in active demand for BTC.

A rise in short-term holder supply relative to long-term holders indicates that more market participants are choosing to speculate rather than hold Bitcoin for the long term.

The 30-day STH Supply is currently at 5,048,760 BTC, while the 30-day LTH Supply stands at 5,532,620 BTC.

"The 30-day STH supply is increasing faster than the 30-day LTH supply, which is usually the case during a late-cycle distribution phase or a macro-level consolidation," the analyst explained.

It’s worth noting that Bitcoin previously experienced similar deep negative divergences in Demand Momentum during mid-2021 and Q2 2022. Both instances were followed by sharp price declines.

However, the ensuing market recovery on both occasions coincided with market bottoms. They also marked the beginning of sustainable bullish momentum in the following months.

If Bitcoin manages to reverse this negative demand trend and push the 30-day Demand Momentum into positive territory, it could signal a strong recovery in investor interest. A return to the “green zone” would likely mark the continuation of the current uptrend, potentially pushing BTC to a new all-time high (ATH) in the near term.

Bitcoin price on the move

While Demand Momentum remains weak, other market signals suggest that Bitcoin could be nearing a trend reversal. For example, Bitcoin’s Apparent Demand – another on-chain metric – has recently shown a sharp rebound, indicating a return of buying pressure.

Additionally, BTC exchange reserves continue to decline rapidly. According to recent data, Bitcoin just recorded its highest exchange withdrawal volume in two years. This ongoing depletion of exchange-held BTC could lead to a supply squeeze, further supporting bullish price action.

Technical indicators also point toward the possibility of BTC testing its current ATH of $108,786. At press time, Bitcoin is trading at $94,773, up 0.3% over the past 24 hours.