Cryptoquant Report Reveals Faltering Global Bitcoin Demand Despite Recent Spike

A recent report from Cryptoquant reveals that comments by Federal Reserve Chairman Jerome Powell sparked a surge in U.S. bitcoin demand last week, though overall global demand remains weak. The report highlights the mixed signals in the market following the Fed’s announcement.

Analysis Says Weak Global Bitcoin Demand Persists

Cryptoquant‘s report details how bitcoin’s price surged by over 6% to $65,000 following Jerome Powell’s remarks on the potential for lower interest rates. The spike in U.S. investor demand was evident through the increasing price premium on Coinbase. The cryptoquant.com report also noted that bitcoin is now flowing back into U.S. exchanges from international platforms, a pattern historically linked with upward price movements.

The researchers state:

The Inter-exchange Flow Pulse (IFP) indicator is again trending upwards (green areas), signaling bitcoin is flowing into [Coinbase] in response to the price premium and higher demand in the USA. An upward trend in the IFP is associated with higher bitcoin prices.

Despite the rally, Cryptoquant’s research indicates that overall demand for bitcoin remains muted. The report emphasizes that while the perpetual futures market saw an increase in open interest by nearly 10,000 BTC since Powell’s statement, the broader demand growth has actually turned negative in recent weeks. Cryptoquant’s data shows that since April, when bitcoin was trading at $70,000, demand has significantly declined, contributing to the ongoing price stagnation.

In its analysis, Cryptoquant researchers also highlighted the low levels of profit-taking during the recent rally. Realized profits amounted to $536 million, considerably lower than the profits seen at earlier market tops this year. According to the analysis, this suggests that the current rally has not yet reached a local top, but the report warns that without a reversal in the declining demand trend, the market may struggle to sustain further price increases.

What do you think about the analysis from Cryptoquant? Share your thoughts and opinions about this subject in the comments section below.

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