Supply and Demand Balance
Markets are a complex balance between sell-side supply, and new demand. Today, I assess both sides of the equation, in a bid to see how stable we are as Bitcoin trades back above $100k.
G’day Folks,
For the last few weeks, the topic of interest has been The Lead Foot of Long-Term Holders, who have been exerting significant sell-side pressure since November. The analogy we used was one of a demand accelerator which was balanced by an equal and opposite foot on the sell-side brakes.
The Lead Foot on the brakes appears to be easing off, with revived supply declining by 45%, from over 40k BTC, to around 22k BTC/day.
In theory, this should be great for the Bitcoin price, allowing the bulls some breathing room to bid the market with less resistance.
But what happens when you also have a softening of demand at the same time?
There are many indicators suggesting this may be the case, and spot trading volume is falling off a cliff as we speak, down 53% since November.
In today’s post, I will explore both the sell-side supply, and the demand side of this story, to see if we can narrow down whether this rally is to be believed, or just another day of choppy conditions.
📈 Reminder: you can find the charts from our articles on the Checkonchain Charting Website, and a guide in our Charts Tutorial Video.
Premium Members will find the TL:DR summary, video update and the rest of the written post below. Consider upgrading to premium today to unlock the rest of the content!