Bitcoin Navigates Bearish Price Action While Spot Demand Shows Signs of Revival
Bitcoin Navigates Bearish Price Action While Spot Demand Shows Signs of Revival
Bitcoin's price is currently under pressure, struggling to hold key resistance levels and facing potential further declines, with technical indicators signaling a bearish outlook and possible buyer exhaustion. This faltering recovery comes amidst a backdrop of mixed demand signals. On one hand, spot demand for BTC, as measured by CryptoQuant's 'Apparent Demand' metric, has turned positive for the first time since early October. On the other hand, the market is experiencing subdued activity in perpetual futures and continued outflows from US spot Bitcoin ETFs, suggesting a broader de-risking trend and limited speculative buildup.
Bitcoin's Faltering Recovery and Bearish Technicals
Bitcoin price has recently struggled to maintain a recovery above the $107,000 mark, subsequently trimming gains and indicating a potential for further downward movement if it trades below $102,500. The cryptocurrency initiated a fresh decline after failing to clear the $107,000 resistance, now trading below $105,500 and its 100 hourly Simple Moving Average. A significant break below a bullish trend line with support at $104,200 on the hourly BTC/USD pair chart suggests a bearish shift. Should Bitcoin fail to rise above the $105,000 resistance, further declines toward $102,800, $102,400 (61.8% Fib retracement), and potentially $100,000 are anticipated. Technical indicators reinforce this bearish sentiment: the Hourly MACD is accelerating in the bearish zone, and the Hourly RSI for BTC/USD is below the 50 level, signaling weakening momentum among buyers.
Spot Demand Rebounds Amidst Weak Futures and ETF Outflows
Contrasting the bearish price action, a report from CryptoQuant's head of research, Julio Moreno, indicates a significant positive shift in Bitcoin's spot demand. The 'Apparent Demand' metric, which measures the amount of spot demand by comparing BTC's production to changes in its 1-year inactive supply inventory, has turned positive for the first time since early October. This suggests a renewed interest from spot buyers, providing a potential counterpoint to the current price struggles.
However, this growth in spot demand is not mirrored across all segments of the market. Data from Glassnode highlights that attention in the perpetual futures market remains low, with the Bitcoin Futures Open Interest staying at subdued levels since last month's leverage flush. This indicates limited speculative buildup and a generally subdued market sentiment in derivatives. Furthermore, US Bitcoin spot Exchange-Traded Funds (ETFs) have predominantly experienced outflows since early October, which Glassnode interprets as a 'broader de-risking phase among ETF investors.' Despite the growing spot demand, Bitcoin's price has recently retraced some of its gains, falling to around $103,200, reflecting the mixed and cautious sentiment prevailing in the broader crypto market.