According to a report from CryptoQuant analysts, Bitcoin demand is stabilizing, but it requires significant growth in the fourth quarter to maintain elevated prices. Since July, Bitcoin's apparent demand—determined by the difference between the daily total Bitcoin block subsidy and the daily change in the amount of Bitcoin held for over a year—has varied widely, with a net loss of 23,000 and a gain of 69,000 Bitcoin.
September exhibited less volatility in Bitcoin demand, showing a steady increase throughout the month. However, this growth was insufficient to spark a prolonged price rally. Analysts noted that in April, Bitcoin's apparent demand surged by 496,000 Bitcoin when prices hovered around $70,000, indicating there is ample room for growth in the upcoming quarter.
The report also revealed that the behavior of Bitcoin holders at the start of 2024 resonates with patterns observed in previous halving cycles. Earlier in the year, long-term holders sold Bitcoin to new buyers, driving demand, but this trend weakened during the summer months. Analysts suggest that if historical trends hold, demand growth should resume, potentially leading to increased short-term supply.
Another area of renewed strength has been the U.S. spot Bitcoin exchange-traded funds (ETFs). In September, there was a shift from net selling 5,000 Bitcoin at the beginning of the month to net buying 7,000 Bitcoin by September 30, marking the highest daily purchase volume since July. Spot ETFs averaged nearly 9,000 Bitcoin purchases daily in Q1 2024, contributing to rising Bitcoin prices.
Despite the positive trend, September 30 marked the first daily net outflow from spot Bitcoin ETFs since September 3, ending an eight-day positive flow streak. BlackRock’s IBIT, the largest spot Bitcoin ETF, was the only fund among the top 12 to report positive inflows, with $40.84 million entering the fund.
As of 12:15 a.m. ET, Bitcoin’s price has seen a modest increase of 1.2%, trading around $62,139, according to The Block’s Bitcoin Price Page.
Disclaimer: This article is for informational purposes only and should not be considered legal, tax, investment, or financial advice.
