On-chain data shows that Bitcoin’s ‘Apparent Demand’ indicator has turned back to positive. Here’s what this could mean for asset prices.
Bitcoin’s Virtual Demand Has Risen Back to Positive Ground
In a new post on X, Ki Young Ju, founder and CEO of on-chain analytics company CryptoQuant, discussed the recent trend in Bitcoin’s Apparent Demand index.
“Apparent demand is the difference between production and changes in inventory,” notes Young Ju. “In Bitcoin, production refers to mining output, while inventory refers to supply that has been idle for more than a year.”
Mining output here measures the total amount of BTC that miners generate by adding blocks to the network and earning rewards. At the same time, the one-year inactivity provision includes tokens that have not been transferred to the blockchain for more than one year.
Below is a chart of Apparent Demand for Bitcoin shared by an analyst.
The trend in the 30-day sum of the metric over the last few years | Source: @ki_young_ju on X
As can be seen in the graph, Bitcoin Apparent Demand rose to the highest levels during the rally to an all-time high (ATH) in the first quarter of the year.
A positive value suggests the decrease in BTC inventory is greater than its production. “If the decrease in inventory exceeds the production, the demand increases, and vice versa,” explains the CryptoQuant CEO.
However, the high demand for the cryptocurrency could not be taken care of as the metric dropped to neutral values soon after the asset price fell into its consolidation phase.
However, this trend of sideways movement to near-neutral levels seems to have finally stopped, as the metric has seen a positive rise.
So far, Apparent Demand has not reached nearly as high levels as it did during the March ATH, but its current value is still quite remarkable, indicating that demand has returned for the coin.
Another metric that shows new demand is coming to Bitcoin is the Realized Cap of new investors, as CryptoQuant writer Axel Adler Jr. revealed in a new post on X.
The value of the metric appears to have seen a rise in recent days | Source: @AxelAdlerJr on X
Realized Cap is an index that, in short, keeps track of the total amount of money that Bitcoin investors have invested in the cryptocurrency.
In the chart, Realized Cap data, mainly for “new investors”, is shown, which are owners who bought their coins within the last month. This metric can be a proxy for new income coming into the estate.
“Demand to buy the coin from new investors has resumed, having increased by 3% in the last 10 days. This is a good sign for the market,” commented the analyst.
BTC price
Bitcoin was close to the $68,000 level earlier in the day, but seems to have seen a pullback, as it is now back to $66,100.
Looks like the price of the coin has been on the rise recently | Source: BTCUSDT on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com