Bitcoin’s recent price volatility and struggle to maintain the $100K level have left investors uncertain about the cryptocurrency’s short-term trajectory. A closer look at on-chain metrics reveals a critical relationship between Bitcoin’s price performance and demand growth, shedding light on the current market dynamics.
According to CryptoQuant’s Head of Research, Julio Moreno, Bitcoin’s price return closely follows the trajectory of its demand growth. Since early December, demand growth has been slowing, directly correlating with diminished returns. This observation underscores the crucial role of market participation in sustaining bullish momentum.
The current state of the market, characterized by declining speculative appetite and weakening leveraged positions, has contributed to choppy price action. As Bitcoin hovers below the $100K mark, both bulls and bears are locked in a battle for control, with demand growth serving as a pivotal factor in determining the cryptocurrency’s future direction.
Bitcoin’s inability to break above $100K has raised concerns among investors, signaling potential growing weakness in the market. Meanwhile, bears have been applying consistent pressure, but they have yet to force the price below the critical $95K support level. If Bitcoin drops below this level in the coming days, a further decline into the $90K demand zone is likely, potentially leading to increased selling pressure as investors grow wary of a deeper correction.
However, if BTC can maintain its position above $95K, there is still potential for bulls to regain strength and push the price back toward the $100K mark. For now, the market remains uncertain, and traders are closely monitoring these key levels for signs of the next major move.
The relationship between Bitcoin’s price growth and demand highlights the importance of monitoring on-chain metrics to gauge market sentiment and predict potential rallies or corrections. As the battle between bulls and bears continues, the coming days could prove decisive for BTC’s short-term and long-term outlook.
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Tags: Bitcoin, BTC, Bitcoin price, demand growth, on-chain metrics, technical analysis, market sentiment