Bitcoin Demand Flips Negative as Supply Outpaces Buyer Interest

On June 30, the apparent demand for Bitcoin flipped negative, indicating a concerning trend in the market. At the time, Bitcoin was trading at $108,202.21, with a modest increase of 0.77%. This shift suggests that the supply from miners and long-term holders is exceeding the interest from new buyers, potentially signaling deeper price weakness ahead. Analyst Axel Adler noted that Bitcoin’s valuation is currently in a neutral zone, reflecting market indecision. With mounting selling pressure, key resistance levels are identified around $110,000 and $106,000.

The apparent demand metric is crucial as it indicates whether new market interest is keeping pace with supply. Currently, it is not. The supply from miners and long-term holders, often referred to as smart money, is outpacing the inflow of new buyers. When Bitcoin apparent demand flips negative, it raises concerns for traders and holders, as it means coins are entering the market faster than they are being bought. This imbalance typically leads to short-term corrections and signals a weakening of market confidence. Unless demand rebounds swiftly, prices may struggle to find strong support, with resistance at $110,000 acting as a psychological barrier.

One significant development is the change in behavior among long-term holders (LTHs). Realized profits among LTHs have reached around 10,000 BTC, while short-term holders are seeing profits below 3,000 BTC. This shift is important because LTHs usually sell when they sense market peaks or want to lock in gains, influencing market sentiment. However, this number is still far below the historic 30,000 BTC mark, which typically precedes market tops, suggesting that a panic-selling point has not yet been reached. Nevertheless, continued cashing out by LTHs could exacerbate the supply-demand mismatch and delay any rally attempts.

On-chain data presents a mixed picture. Axel Adler highlighted the “Bitcoin Distribution by Realized Supply” ratio, which compares the current price to the price at which most BTC last moved. This ratio is analogous to the price-to-earnings ratio used in stock analysis. A higher value indicates that Bitcoin is expensive, while a lower value suggests it is cheap. Currently, the BTC price is just above its annual ratio, similar to the situation in November 2024, right before a major rally. This indicates that Bitcoin is neither clearly overbought nor undervalued, suggesting a balanced market. However, the fragile demand still leaves the price vulnerable to dips.

Bitcoin’s resistance levels are clearly defined at $110,000 and $106,000. With prices near $108,000, the market is approaching critical technical zones. These levels may block upward movement unless demand recovers quickly. If the price fails to break through $110,000, sellers might regain control. The combination of weak demand, increased LTH selling, and a neutral valuation creates a delicate environment, making it challenging for traders to navigate. While no dramatic sell-off is guaranteed, caution remains the best approach. Until demand matches or exceeds supply, risk stays elevated, and a stronger recovery signal is needed before calling the next bullish phase.

The current market data calls for a cautious stance. When Bitcoin apparent demand flips negative, it indicates an imbalance where miners and seasoned holders are selling more than buyers are willing to purchase. Valuation metrics offer no clear relief, showing neither overvaluation nor a bargain. Resistance around $110,000 could hold firm unless demand picks up. Until clearer signals emerge, a patient and alert approach remains key in this uncertain market phase.