Crypto Market Adopts Cautious Stance as Bitcoin Demand Declines
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Bitcoin is experiencing a shift towards a weaker market structure as the strong demand that upheld prices earlier this year wanes. CryptoQuant notes that the primary demand wave has subsided, with ETF accumulation slowing, Treasury-company acquisitions drying up, and Strategy's purchases hitting their lowest point this year.
While CryptoQuant does not foresee an immediate crash, it suggests that upward potential is now restricted, with rallies likely to falter below the 365-day moving average unless a new demand wave arises.
Polymarket traders are responding to this weakness, predicting a shift towards $85,000 and dismissing upside scenarios.
Glassnode reports that short-term holders are incurring losses at the fastest rate since the FTX incident, ETF flows remain negative, and the derivatives market has turned risk-averse, with options traders favoring puts and implied volatility rising.
Glassnode identifies the Active Investor cost basis near $88,600 as the next significant test. A drop below this level would lead to losses for recent investors for the first time this cycle, indicating a shift towards bearish momentum. The next support is at the True Market Mean around $82,000, which could signal a transition to a bear market akin to 2022 and 2023.
The upcoming weeks will determine whether buyers can regain control or if support will collapse, deepening the downturn.
Market Movement
BTC: Bitcoin is trading around $92,000, having briefly dipped below $90,000 earlier in the week, leaving the market unsettled as it seeks stability.
ETH: Ether is trading at approximately $3,038, showing a modest decline as it mirrors Bitcoin's defensive trend.
Gold: Gold is near $4,067 after reaching an intraday high of $4,132, as market-wide risk aversion prevails.
Nikkei 225: Asia-Pacific markets rose Thursday, driven by a robust Nvidia earnings report, boosting chip stocks and lifting the Nikkei 225 by 3.7%.