Bitcoin Holds Above $100,000 Despite Record Low Demand Momentum

Bitcoin has managed to maintain its value above $100,000 despite experiencing the worst demand momentum on record. This unexpected resilience has caught the attention of market observers, who are now scrutinizing the underlying factors driving this phenomenon. The demand momentum, as indicated by CryptoQuant, has reached an all-time low, suggesting a significant shift in investor sentiment towards Bitcoin. This shift is particularly noteworthy given the cryptocurrency's historical volatility and its tendency to react sharply to changes in market conditions.

The current situation presents a paradox: while demand momentum is at its lowest point, Bitcoin's price remains steadfast above the $100,000 mark. This discrepancy could be attributed to several factors, including the limited supply of Bitcoin and the growing institutional interest in the cryptocurrency. Institutional investors, who have been increasingly allocating funds to Bitcoin as a hedge against inflation and market uncertainty, may be playing a crucial role in stabilizing its price. Additionally, the halving event, which reduces the block reward for miners, has historically led to a decrease in the supply of new Bitcoins, potentially contributing to its price stability.

However, the long-term implications of this trend remain uncertain. Analysts have noted that the current demand momentum could be a precursor to a more significant correction in the Bitcoin market. If the demand momentum continues to decline, it could lead to a sustained period of price stagnation or even a decline in Bitcoin's value. Conversely, if institutional interest continues to grow, it could provide a buffer against potential market downturns and support Bitcoin's price above the $100,000 threshold.

Bitcoin’s current market structure departs from previous cycles. From 2020 to 2025, demand momentum aligned with price action. Early 2021 saw a historic surge in momentum as Bitcoin rose from $10,000 to over $60,000. However, this phase reversed in mid-2021, leading to a prolonged downtrend through 2022. Bitcoin then bottomed out near $15,000 as momentum turned deeply negative. Recovery began in late 2022. The price started climbing steadily, supported by alternating momentum phases. Another bullish breakout emerged in late 2023 and early 2024, pushing Bitcoin close to $70,000. Consequently, momentum surged again, confirming strong market interest. However, mid-2024 reversed with momentum indicator collapsing, reaching historic lows despite Bitcoin’s price climbing past $100,000. This sharp divergence signals a breakdown in traditional market behavior. It suggests that price gains may not reflect genuine demand from new participants.

On-chain data reveals conviction from long-term holders. The 30-day Binary CDD moving average remains well below the critical 0.8 threshold. Historically, values above 0.8 indicated overheated markets and looming corrections. Currently, the Binary CDD peaked near 0.6 and is now declining. Hence, this drop implies a lack of excessive profit-taking or panic selling. Additionally, the 30-day simple moving average of demand momentum confirms the downward trend but also suggests potential stabilization. This phase appears more like a consolidation zone than a market top. Importantly, Bitcoin’s price has bounced from $98,000 to above $100,000 again.

In conclusion, while Bitcoin's ability to hold above $100,000 despite the worst demand momentum on record is a testament to its resilience, the underlying factors driving this trend are complex and multifaceted. As the market continues to evolve, it will be essential for investors to stay informed about the latest developments and adapt their strategies accordingly.