Head of research at on-chain analytics firm CryptoQuant has explained how demand makes the basis of a Bitcoin cycle, rather than price performance.
Bitcoin Apparent Demand Has Been Declining RecentlyThus, the Apparent Demand basically compares the production of Bitcoin against changes taking place in its inventory. Below is the chart shared by Moreno that shows the trends in the 30-day and 1-year versions of the Apparent Demand over the past decade.
As is visible in the graph, the last few Bitcoin cycles have all transitioned into a bear market when the Apparent Demand has plunged into the negative region on both the monthly and yearly timeframes.
In the current cycle, the 30-day Apparent Demand has plunged into the red zone recently, suggesting that the monthly demand for the asset has been negative.
On the annual scale, the metric is still at a positive level, but its value has been following a downtrend. If this decline keeps up, it won’t be long before the indicator has dipped into the negative territory.
Considering the pattern from the previous cycles, the current structure in the Apparent Demand is certainly looking bearish. It only remains to be seen, though, whether the yearly version of the metric will cross into the red zone or if it will rebound, signaling the return of demand.
Bitcoin has taken to consolidation recently as its price is still floating around the $88,000 level.
