Bitcoin Demand Sinks to Lowest Since 2019, Raising Risk of Final Capitulation
Summary
- Bitcoin demand has fallen to its lowest level since 2019, raising the possibility that investors are entering a capitulation phase.
- An on-chain analyst said a 30-day composite demand indicator for spot and perpetual futures markets fell to negative 650,000 BTC, an unusual development seen only three times before.
- The simultaneous retreat in spot buying and leveraged futures capital has fueled talk of extreme volatility or another sharp decline, though some also see it as part of a long-term market bottom formation process.
Forecast Trend Report by Period
Bitcoin market demand has contracted to its weakest level since 2019, according to a new analysis, raising the possibility that investors are entering a capitulation phase.
On-chain analyst MorenoDV wrote on June 9 that a 30-day composite demand indicator for Bitcoin spot and perpetual futures markets had fallen to negative 650,000 BTC.
Demand destruction on that scale has appeared only three times in Bitcoin's history, making it a highly unusual event, he said.
MorenoDV said the current backdrop may be more than a simple price correction and could mark the early stage of a final shakeout typically seen near the end of a bear market.
The analysis showed spot buying and leveraged capital in the futures market are retreating at the same time. That suggests risk aversion among market participants has intensified sharply.
He added that in past cases, the indicator did not serve as an immediate bottom signal. Instead, it often appeared just before extreme volatility or another sharp drop.
Market participants have pointed to recent spot ETF outflows, macroeconomic uncertainty and weaker appetite for risk assets as factors behind the decline in Bitcoin demand.
Some also view the extreme contraction in demand as part of a longer-term market-bottoming process.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
