Bitcoin Demand Indicator Flips Negative Amid $77,000 Price Struggle

Bitcoin demand weakens as price hits local lows

Bitcoin's price fell to a local low of $76,400 on Wednesday as a key demand indicator turned negative. This shift followed a brief recovery in August and occurred during a broader sell-off in global bonds and equities. While the price has since moved back toward the $77,000 level, it remains under pressure from significant resistance.

The decline in price coincided with $236 million in outflows from US spot Bitcoin exchange-traded funds (ETFs) on the previous day. ETFs are investment products that allow people to buy into an asset without holding it directly. Data from CryptoQuant indicates that the market's appetite for the cryptocurrency is cooling after a short period of growth.

Important market data

• Bitcoin reached a low of $76,400 before attempting to reclaim $77,000.
• US spot Bitcoin ETFs recorded outflows totaling $236 million on Tuesday.
• Major Asian stock indexes, including the KOSPI and Nikkei 225, suffered sharp losses.
• Speculation grew regarding a central bank intervention as the USD/JPY pair dropped to 158.5.

How the demand indicator works

The \"apparent demand\" metric, provided by CryptoQuant, measures the difference between newly mined Bitcoin and changes in the supply that has been inactive. When this indicator is positive, it suggests that older coins are becoming active and the market is absorbing them along with new issuance. This is typically viewed as a sign of active buying interest.

The current negative reading means that coins are aging into dormancy faster than miners are producing them. This suggests that there is currently a lack of strong spot demand to keep up with the supply of new coins and those entering the market.

Global markets face sharp declines

The pressure on Bitcoin comes as Asian stock markets experienced steep drops, likely influenced by rising oil prices and a sell-off in the artificial intelligence sector. South Korea’s KOSPI fell 4%, led by losses in major chipmakers like Samsung Electronics. Japan’s Nikkei 225 also dropped 2.9%, impacted by tech companies such as SoftBank Group.

In the currency markets, the USD/JPY pair saw a sudden decline to 158.5. While no official announcement has been made, market analysts believe this movement suggests an intervention by the Bank of Japan to support the yen at the 160 level.

Why these indicators matter

The flip to negative demand is a signal that the momentum seen during the August rally may be fading. For Bitcoin to move higher, it needs to overcome a cluster of resistance levels where selling pressure is concentrated. The simultaneous drop in traditional stocks and crypto suggests that investors are currently moving away from riskier assets across the board.

Sources

• Cointelegraph