On-chain data shows Bitcoin’s ‘Clear Demand’ indicator has returned to positive. This is the impact on asset prices.
Bitcoin Demand Has Clearly Surged Back Into Positive Territory
In a new post on X, Ki Young Ju, founder and CEO of on-chain analysis company CryptoQuant, discusses recent trends in the Apparent Demand indicator for Bitcoin.
“Real demand is the difference between production and inventory changes,” Young Ju said. “For Bitcoin, production refers to mining issuance, while inventory refers to supply that has been dormant for more than a year.”
Mining issuance here measures the total amount of BTC that miners generate by adding blocks to the network and receiving rewards. At the same time, the one-year inactive supply consists of tokens that have not been transferred to the blockchain for more than one year.
Below is a graph of Real Demand for Bitcoin shared by analysts.
The trend in the 30-day sum of the metric over the last few years | Source: @ki_young_ju on X
As seen in the graph, Bitcoin’s Apparent Demand has increased to very positive levels during its rally to a new all-time high (ATH) in the first quarter of this year.
A positive value indicates the decrease in BTC supply is greater than its production. “If the decrease in supply exceeds production, then demand increases, and vice versa,” explained the CryptoQuant CEO.
However, the high demand for cryptocurrencies cannot be sustained as the metrics have slumped to neutral values as soon as the asset price fell into a consolidation phase.
However, the trend of sideways movement around almost neutral levels seems to have finally been broken recently, as the metric has shown a positive spike.
So far, Apparent Demand has not reached levels as high as it was during March’s ATH, but its current value is still quite prominent, indicating that demand for the coin has returned.
Another metric that signals that new demand is coming into Bitcoin is the Realization Limit of new investors, as CryptoQuant author Axel Adler Jr. points out. in a new post on X.
The value of the metric appears to have seen a rise in recent days | Source: @AxelAdlerJr on X
Realized Cap is an indicator that, in short, tracks the total amount of capital that Bitcoin investors as a whole have invested into the cryptocurrency.
On the graph, Realization Limit data is displayed, specifically for “new investors”, namely holders who bought their coins in the last month. This metric can represent new capital coming into the asset.
“Coin purchase demand from new investors has returned, with an increase of 3% over the last 10 days. This is a positive signal for the market,” said the analyst.
BTC Price
Bitcoin had approached the $68,000 level earlier in the day, but appears to have suffered a setback, as it is now back at $66,100.
Looks like the price of the coin has been on the rise recently | Source: BTCUSDT on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
