Bitcoin's Price Surges 1.27% Despite 642,000 BTC Demand Drop

Bitcoin (BTC) has recently experienced a significant price rally, with its value surging to new heights. However, despite this impressive performance, spot demand for the cryptocurrency remains relatively low. Recent data indicates that while the pace of Bitcoin's price increase has slowed from previous drops, the overall trend in spot demand continues to decline. This discrepancy between price and demand suggests a cautious approach from market participants, who may be hesitant to commit to large-scale investments despite the bullish momentum.

Bitcoin’s rally not sustainable. This negative momentum has prevailed despite the ongoing market rally that saw the price of the leading cryptocurrency, Bitcoin, regain previous losses while settling above the $90,000 mark on April 22. Bitcoin has led the market’s recent rally, with its price surging as high as $91,700 from the low of $87,031 experienced during the early hours of the day. However, Bitcoin’s broad demand momentum, which monitors and tracks buying activity from new investors against existing holders, has continued to decline, sparking concerns among investors about Bitcoin’s future returns.

The analytics firm revealed that Bitcoin’s demand momentum is now down by 642,000 BTC, the lowest level it has reached since October 2024. This suggests that investors are hesitating to acquire the token amid suspected early bear market trends. This metric has threatened the sustainability of Bitcoin’s bull run, as historical trends show that sustained appreciation in Bitcoin’s price is often supported by both rising demand and strong momentum. Hence, the firm has warned that Bitcoin might not resume a sustainable rally if both the Bitcoin spot demand and the broad demand momentum do not stabilize and return to steady positive growth.

According to CryptoQuant, the plummeting interest in Bitcoin’s recent demand is evident in the stable U.S.-based spot Bitcoin ETF flows. This stability in Bitcoin ETF flows has been noticed since late March, where it has consistently moved between -5,000 and +3,000 BTC per day. Although Bitcoin has shown strength in other metrics, the negative demand momentum suggests reduced interest in Bitcoin compared to previous bull cycles. As such, this has sparked concerns among existing holders and investors, as large investors still hope for further rallies to maximize gains.

The current price trajectory of Bitcoin has been marked by a series of technical milestones. The digital asset has successfully broken through key moving averages, including the 50 and 200 EMAs, which have historically acted as significant resistance levels. This breakout has fueled bullish sentiment across the broader market, with Bitcoin currently trading at approximately $88,619 after a 1.27% daily gain. The lack of substantial resistance between the current price and the next psychological barrier at $94,000 creates a favorable environment for continued price growth driven by momentum.

The recent rally in Bitcoin's price has been supported by a noticeable increase in trading volume, indicating decisive action from both institutional and retail buyers. The Relative Strength Index (RSI) currently stands at 60, suggesting that the asset is in bullish territory with room for further growth without entering overbought conditions. The breach of the 200 EMA, which had served as a recalcitrant ceiling for over a month, signals a shift in market sentiment. Bullish traders are likely to target $94,000 as the next take-profit level if Bitcoin can maintain its current pace and close a few daily candles above $88,000.

Despite the bullish technical indicators and price momentum, the underlying spot demand for Bitcoin remains subdued. This discrepancy highlights a potential disconnect between short-term price movements and long-term investment sentiment. Market participants may be adopting a wait-and-see approach, preferring to observe the sustainability of the current rally before committing to significant investments. The cautious stance is further evidenced by the relatively low volume accompanying the recent price surge, which contrasts with the decisive action seen during previous rallies.

The current market dynamics suggest that while Bitcoin's price may continue to rise in the short term, sustained growth will depend on a corresponding increase in spot demand. The lack of substantial resistance levels between the current price and the $94,000 mark creates an opportunity for further price appreciation. However, the cautious approach from market participants indicates that the rally may be vulnerable to corrections if demand does not catch up with the price momentum. As the market continues to evolve, it will be crucial to monitor both technical indicators and spot demand to gauge the sustainability of Bitcoin's price rally.