Bitcoin demand has been declining over the previous several days, as the world’s leading crypto asset is still trading within the longtime consolidation channel.
The price of Bitcoin incurred some intensified momentum overnight, causing it to decline to $9.1k prior to a rebound to above $9.4k. Since then, Bitcoin has been trading around this price level but its response to a possible decline to its major support at $9k could inform traders of the trend in the coming weeks and months.
Data shows that on-chain demand for Bitcoin has been decreasing in recent times and it is a factor that favors the sellers. There are abundant dynamics signaling a declining investor demand for Bitcoin, which has the potential to weaken Bitcoin’s technical strength.
Arcane Research noted in a report that Network Demand Score of Bitcoin has declined recently, as influenced by weakening MRI, velocity, short-term spend, short-term fees, and more. This has led to a decline in Network Demand metrics, typically a signal that a downside move is forthcoming.
“MRI, velocity, short-term spend and short-term fees look weak. Notably, velocity has been trending down since mid- May, indicating a slowdown in transaction activity on the Bitcoin network. This favors more downside for Bitcoin.”
At press time, the performance of Bitcoin is around $9,388, where it has been hovering within the previous few weeks, but it moved lower within the previous 12 hours. The bears attempted to take the price to $9k overnight but the bulls stood their ground. However, the inability to come up with a sustained rebound since then appears to suggest a forthcoming downside move.
According to analysts, the current price range of Bitcoin offers the bulls a chance to build exposure:
“BTC LTF Update: Price slowly back down to around $9300 which was expected due to bulls not being able to flip $9500 on the previous retest and price showing distribution… Good wicks previously below $9200 as buyers step in, let’s see how well we hold up this time,” one analyst noted.