Bitcoin Apparent Demand Rises 20% in March

On-chain data indicates that the Bitcoin Apparent Demand metric has been recovering recently. However, a trend reversal has not yet been confirmed. The Apparent Demand metric measures the demand for Bitcoin by comparing its production and inventory change. The production of Bitcoin is equated to the amount that miners receive in rewards every day, formally known as the issuance. For gauging the inventory of BTC, the 1-year+ dormant supply is used. The change in the inventory would be the changes happening in this part of the cryptocurrency’s supply.

When the value of the Apparent Demand is positive, it means BTC’s inventory is seeing a larger decrease than its production, signaling that there is demand present for the asset that’s pulling coins out of the inventory. On the other hand, the metric being under zero suggests coins are being stashed away in the inventory, potentially because of low demand.

The Bitcoin Apparent Demand rose to sharp positive levels during the last couple of months of 2024, signaling strong demand. However, this year, the trend has noted a shift. During January and February, demand waned but still remained at positive levels. This changed in March, when it took a dive into negative territory. This month, the metric appears to have undergone another change in direction as it’s now on the rise again.

While this could be an early sign that there is a shift occurring in market behavior, the quant has warned that interpreting this as the beginning of a new bullish phase may be premature. Something that could add credence to the idea that this may not be a shift away from a bearish trajectory at all is the trend followed back in the 2021 cycle. From the chart, it’s visible that the Bitcoin Apparent Demand turned negative as the 2021 bull market topped out. After forming a bottom in January 2022, though, the indicator showed a reversal and by the middle of the year, it recovered all the way back into the positive zone.

But clearly, while the metric may have displayed this trend, the cryptocurrency was still in the clutches of a bear market, which was only pulling its price deeper. “So while this current bounce is noteworthy, it’s more likely a pause in pressure, not a definitive signal of accumulation or a macro bottom,” notes the analyst.

Unlike the earlier rebounds, the latest Bitcoin recovery has shown staying power so far as the coin’s price is still floating around $85,000. The price of the coin has been climbing up over the last few days. However, it is important to note that this does not necessarily indicate a reversal in the bearish trend. The current bounce in the Bitcoin Apparent Demand metric could be a pause in pressure, rather than a definitive signal of accumulation or a macro bottom.