Bitcoin is currently in a precarious position, striving to maintain stability above the $90,000 mark as the market assimilates recent comments from Federal Reserve Chair Jerome Powell. His statements reignited macroeconomic uncertainties, unsettling an already delicate market environment that had previously shown signs of consolidation.
In the immediate aftermath, Bitcoin experienced a momentary spike in volatility, retreating from local highs but finding tentative support in the vicinity of $90,000. While this movement was not fundamentally damaging, it highlighted the cryptocurrency’s persistent sensitivity to shifts in broader economic narratives.
Delving deeper into the on-chain analytics reveals a clear narrative of subdued demand for Bitcoin. An analysis by Darkfost indicates that the current market conditions do not yet reflect the extreme weakness typical of the early stages of a bear market. However, compared to previous expansion phases, demand has softened significantly.
Key to this analysis is a metric that contrasts new Bitcoin issuance with supply that has been inactive for over a year—a framework often used to gauge so-called “apparent demand.” When this ratio dips below zero, it signals that newly available supply exceeds demand, thus creating net selling pressure. Conversely, a move above zero indicates healthy demand and market absorption.
Presently, this indicator remains in negative territory, indicating a cautious environment where the conviction among buyers is still limited. With Bitcoin hovering just above $90,000, the interplay between macroeconomic uncertainties and the underlying demand will likely dictate the asset’s next major move.
Demand Weakness Indicates Prudence, Not Panic
Currently, Bitcoin’s apparent demand sits firmly negative, with approximately −106,000 BTC on a 30-day cumulative basis. This situation demonstrates that more supply is entering the market than being absorbed by new buyers, typically indicative of a risk-averse positioning rather than a strong accumulation effort. Investors are seemingly reluctant, cautiously reducing their exposure as Bitcoin remains a high-beta asset, heavily influenced by macroeconomic signals and uncertainty.
The current demand landscape conveys a market that may be defensive, but certainly not panicked. There is no visible evidence of forced liquidations or broad capitulation; rather, the data suggests a controlled distribution paired with a lack of urgency from buyers. Investors are, in effect, adopting a wait-and-see approach, holding back fresh capital until clearer signals from macroeconomic conditions, price trends, or on-chain metrics emerge.
Notably, history reveals that periods characterized by weak demand often coincide with opportunities for long-term gains. In times of low interest and muted sentiment, price stability can set the stage for patient investors to establish positions with lesser competition. However, navigating these waters requires a focus on long-term strategies rather than impulsive, short-term speculation.
Taking bold bets against the prevailing demand trend remains risky. As long as apparent demand remains below zero, any upward moves are more likely to be corrective rather than significant and impulsive. At this juncture, Bitcoin exists in a phase where disciplined patience outweighs conviction, and time rather than momentum becomes the greatest asset.
Bitcoin Consolidates Around Key Support
After a sharp correction from October highs, Bitcoin has continued to consolidate, with prices stabilizing between $90,500 and $91,000. On a three-day chart, BTC remains below its declining short- and medium-term moving averages, indicating that bearish momentum has not completely abated. These moving averages present dynamic resistance, hindering attempts to push beyond $94,000 to $96,000.
Despite this, the long-term trend structure remains unbroken. Bitcoin retains its position above the long-term moving average, which is steadily rising and currently situated in the $88,000 to $89,000 range. This level has effectively served as crucial structural support amidst the recent consolidation, hinting that selling pressure may be waning as pricing tightens.
The price movement over recent weeks underscores a decrease in volatility and the formation of overlapping candles—a typical manifestation of a market transitioning from impulsive dynamics to a more balanced state. The reduction in trading volume further substantiates the notion that aggressive selling has diminished, yet buyer caution persists.
As long as BTC sustains its position above the long-term moving average, this current phase appears more akin to consolidation rather than an imminent trend reversal. However, a decisive reclaiming of resistance in the $94,000 to $96,000 range is essential to confirm any renewed bullish momentum. Absent this, Bitcoin is likely to remain range-bound, accumulating energy for its next significant move.
Featured image from ChatGPT, chart from TradingView.com.
