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

Bitcoin’s Demand On The Decline

Cryptoquant stated that the demand for the flagship crypto has declined since April and has dropped to negative territory since the start of the month. The report further revealed that BTC’s apparent demand 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 BTC’s unmoved supply for a year or longer. This key indicator signals a weakness in BTC’s demand growth. This weak demand for Bitcoin is also evident in how the increase in the total holdings for large Bitcoin investors has slowed from a monthly pace of 6% in March to 1%.

The declining demand for the flagship crypto has consequently affected its price, seeing how BTC has dropped from its all-time high (ATH) of $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 BTC’s demand might be thanks to the US Spot Bitcoin ETFs. The average daily purchases from these funds have declined from 12,500 BTC in March to 1,300 BTC last week. This slow 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 remarked that a spike in Bitcoin’s demand growth, primarily through the Spot Bitcoin ETFs, is essential for a BTC price recovery and the possibility of reaching new highs in this market cycle. 

Long-Term Holders 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 accumulating BTC at “unprecedented levels,” with their holdings growing at a record-high monthly rate of 391,000 BTC. 

Interestingly, demand from these 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 is taking ‘buying the dip’ seriously. NewsBTC recently reported that 75% of BTC’s supply, held by these long-term holders, hasn’t been moved in over six months despite declining prices. 

At the time of writing, Bitcoin is trading at around $59,400, down over 2% in the last 24 hours, according to data from CoinMarketCap.