A recent research report through the onchain analytics platform Cryptoquant noted that demand for Bitcoin (BTC) has fallen into negative territory. The platform also highlighted the unwavering conviction among long-term holders, which is undoubtedly positive for the flagship crypto.

Demand for Bitcoin is declining

Cryptoquant stated that the demand for the flagship crypto has been down since April and has fallen into negative territory since the beginning of the month. The report further revealed that apparent demand for BTC has fallen from a 30-day growth of 496,000 BTC in April to a negative growth of 25,000 BTC this month.

Cryptoquant explained that the apparent demand refers to the difference between the daily total Bitcoin block subsidy and the daily change in The unchanged supply of BTC for a year or more. This key indicator signals weakness in the growth of demand for BTC. This weak demand for Bitcoin is also evident in the way that the increase in total holdings for large Bitcoin investors has slowed from a monthly pace of 6% in March to 1%.

The falling demand for the major cryptocurrency has consequently affected its price as BTC has fallen from its highest point ever (ATH) from $73,000 in March to as low as $49,000 in early August. The crypto has also continued to range in the $50,000 range as demand remains low.

Cryptoquant suggested that this slowdown in demand for BTC could be due to the US Spot Bitcoin ETFs. Average daily purchases of these funds have fallen from 12,500 BTC in March to 1,300 BTC last week. This sluggish spot demand in the US also coincides with the lower premium for BTC on Coinbase. The Bitcoin premium on Coinbase had risen to 0.25% after these funds launched in January.

Cryptoquant noted that a spike in demand for Bitcoin, primarily through the Spot Bitcoin ETFs, is essential for a recovery in BTC price and the ability to reach new highs in this market cycle.

Long-term investors remain bullish on Bitcoin

Despite the declining demand for Bitcoin, long term holders remain bullish and have taken advantage of lower prices to add more BTC to their positions. According to Cryptoquant, these BTC holders have continued Collecting BTC at “unprecedented levels,” with their holdings growing by a record high of 391,000 BTC in a month.

Interestingly enough, the question of this long term holders is growing faster than in the first quarter of the year, when BTC was trading around its ATH, further highlighting how this category of investors’buy the dip‘ seriously. NewsBTC recently reported that 75% of the BTC supply held by these long-term investors has not moved in over six months, despite falling prices.

At the time of writing, Bitcoin is trading at around $59,400, down more than 2% in the past 24 hours, according to facts from CoinMarketCap.

Main image created with Dall.E, chart from Tradingview.com