Bitcoin Shows Early Rally Signs Amidst Demand Generation Pattern

Bitcoin (BTC) is showing early signs of a potential strong rally, although the price chart alone does not fully capture this sentiment. Onchain data reveals a "demand generation" pattern that mirrors the accumulation phases observed after the Terra/LUNA and FTX collapses, both of which marked significant cycle bottoms. This pattern suggests that participants are not yet ready to sell, indicating a return of meaningful demand amidst suppressed volatility.

Bitcoin researcher Axel Adler Jr. noted that the 30-day moving average of stablecoin inflows has dipped into negative territory, forming the same "blue zones" seen in 2022. This development suggests that participants are not ready to sell, signaling a return of meaningful demand amidst suppressed volatility. Adler Jr. stated, "If inflows remain at or surpass levels seen post-LUNA and FTX, it would strongly signal the launchpad of the next Bitcoin rally."

Despite Bitcoin's price holding strong above $100,000, new user activity remains low, indicating a "HODL" phase where holders are waiting for fresh demand to drive prices higher. The New UTXO 30-day SMA, a proxy for new network activity, is near 570,000, roughly 40% lower than when BTC was trading between $60,000–$70,000. This divergence suggests that long-term holders are locking up coins, not moving them, creating a supply squeeze scenario where price could rapidly rise if new demand kicks in. A move past 700,000 on the New UTXO metric would signal that fresh participants are entering. If it climbs beyond 850,000, it could confirm the start of a full-blown retail and institutional-driven bull phase.

The Exchange Flow Multiple supports this setup, tracking short-term to long-term BTC inflows, which has dropped to a zone that historically marks a seller exhaustion phase where diminished sell-side liquidity sparks upside price momentum. Meanwhile, whales appear to be mobilizing. Large transactions now comprise 96% of all exchange flows, a level historically associated with major price expansions. These entities may position coins for strategic redistribution, often timed with price spikes.

Despite these bullish structural signals, short-term risks remain. The Apparent Demand metric for 30 days has returned negative for the first time in two months, indicating that new buyer demand isn’t strong enough to absorb selling pressure from miners and some long-term holders (LTHs). This imbalance raises the risk of a near-term price correction. In this mixed environment characterized by HODLing, seller exhaustion, and early whale activity, Bitcoin’s next move hinges on whether fresh demand can outpace residual selling. A short-term correction could precede the broader uptrend if momentum stalls near key resistance levels at $110,000.