Bitcoin Demand Gauge Falls to Lowest Since December, Signaling Weaker Spot Buying

Bitcoin is trying to rebound in the mid-$70,000 range, but an on-chain demand gauge has dropped to its lowest level since December. The decline suggests spot buying is no longer strong enough to absorb supply, leaving the market vulnerable to further losses.

CoinDesk reported on May 26 that CryptoQuant's 30-day Bitcoin apparent demand metric fell to negative 147,000 BTC, the lowest level since December.

"Bitcoin's rebound is facing a demand problem," CoinDesk wrote. Bitcoin has recovered from a low near $65,000 in April and remains in the mid-$70,000 range, but on-chain data show buying demand has weakened markedly.

The metric measures how much of the market is absorbing newly mined Bitcoin and long-held coins that are returning to circulation. A positive reading means buyers are absorbing new supply and recirculated coins. A negative reading means more Bitcoin is coming to market than buyers are willing to take in.

CoinDesk said the current rally fits the latter case. Bitcoin has rebounded strongly from its April low, but spot demand needed to support a more sustained advance has yet to appear.

The apparent demand metric had improved from negative 91,000 BTC in April to about negative 11,000 BTC earlier this month, bringing it closer to balance. It has since deteriorated again to negative 147,000 BTC, suggesting the recovery in demand has reversed.

The Coinbase premium points to the same pattern. It has remained negative since late April, indicating US spot buyers have been less aggressive than overseas traders, CoinDesk said.

The market is also wary that the rebound is relying more on futures buying than on spot demand. "Futures-led rallies are more easily reversed," CoinDesk wrote. Perpetual futures positions can unwind quickly when funding rates change or liquidations occur.

Spot buying, by contrast, involves purchasing and holding actual Bitcoin, making it a relatively stickier source of demand. CoinDesk said spot accumulation is less likely to vanish on the first pullback because buyers commit full capital and take delivery of BTC.

Still, weaker demand does not necessarily signal an immediate sharp selloff. CoinDesk said soft demand can leave Bitcoin stuck below its range for days or weeks. But fresh spot buying will be needed for the bull market to extend beyond current levels.

CoinDesk said the $70,000 area will remain a key support zone if spot demand does not recover. CryptoQuant identified $70,000 as the realized price for short-term holders. CoinDesk said that level is where most recent buyers have largely lost their unrealized gains, reducing the incentive to take profits.