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.

Live Chart

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.

Live Chart

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!