Bitcoin (BTC) Apparent Demand Metric Has Shown Early Signs Of Flipping Bullish
- PHPzOriginal
- 2024-07-23 12:45:51789browse
The CryptoQuant Head of Research has explained how the demand for Bitcoin could be in its early stages of recovery, as per on-chain data.
Demand for Bitcoin (CRYPTO: BTC) appears to be showing early signs of recovery, according to on-chain data highlighted by CryptoQuant.
What Happened: In a recent post on Medium, Julio Moreno, head of research at on-chain analytics firm CryptoQuant, pointed out the growth in demand for the primary cryptocurrency.
The key indicator in this regard is the “Apparent Demand,” which gauges the demand BTC is observing at the moment.
To calculate this demand, the difference between two other metrics is taken into account. These metrics are the daily block subsidy and the daily change in the one-year inactive supply.
The first metric indicates the amount that miners receive in block rewards on a daily basis. These rewards are the only possible way to mint more Bitcoin, hence the daily block subsidy reflects the fresh BTC entering into circulation daily.
The second metric tracks the daily net change in the 1-year inactive supply of the asset. A positive change in the metric suggests that a net number of coins surpassed an age of one year on that day, while a negative one implies that some dormant supply has been moved.
The Apparent Demand subtracts this change in the 1-year supply from the daily block subsidy to get an estimation of the demand that’s present for the cryptocurrency.
Now, here’s a chart shared by Moreno, showcasing the 30-day sum trend for the Bitcoin Apparent Demand since the beginning of the year:
As can be seen from the chart above, the Bitcoin Apparent Demand had turned negative earlier this month, but the metric has just returned to the positive territory. Notably, the indicator has also managed to break above its 30-day simple moving average (SMA) with this surge.
The chart shows that the metric’s value was at significant positive levels during the rally towards the new all-time high (ATH) earlier in the year, indicating that the high demand sustained the surge.
As such, this latest bullish reversal in the indicator could also be setting the stage for a positive trend in the asset’s price. However, the indicator’s value is still relatively low, suggesting that a potential recovery could still be in its early phase.
According to Moreno, this is something to keep an eye on in the coming weeks.
BTC Price Action: Bitcoin has seen a notable rally over the past couple of weeks, rising from a low of $54,000 to just under $68,000 at the last check on Monday morning.
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