During the early Asian trading hours on Monday, green candles were seen dominating most crypto asset charts. Bitcoin, the market’s largest asset, has been hovering at the brink of $70k, looking ripe to breach past its $73.7k ATH and script history yet again.
Bitcoin’s ‘apparent’ demand
From the fundamental point of view, Bitcoin’s demand has been on the rise. CryptoQuant’s ‘apparent demand’ indicator has been recovering, indicating that the green phase could prolong.
Apparent demand typically refers to the difference between BTC production [mining issuance] and changes in inventory [long-term inactive supply].
According to the thumb rule, if the decrease in inventory exceeds production, demand is increasing, and vice versa.
This metric kept notching higher when the asset created record highs earlier this year. In fact, even during the 2020-21 bull market phase, the market was characterized by healthy apparent demand.
According to the on-chain metric platform, an expansion of apparent demand is a necessary condition for Bitcoin prices to rally sustainably to a new all-time high.
Comparing the current scenario with previous cycles and quantifying the the room for growth, a recent CryptoQuant analysis pointed out,
“In 2020-2021 and 2024, demand peaked at 490K-550K $BTC before new record highs. Current demand: 182K BTC.”
At this stage, it is also interesting to note that whales have been playing their part in fuelling the BTC rally. Data from Santiment pointed out that in just a span of three days this fortnight, a net rise of 268 more wallets holding between 100-1k BTC was registered.
Previous BTC bull runs have been characterized by significant whale buy activity, and this time around seems no different.
