) price dropped 5.42% over the last 24 hours to hit a new multi-week low at $57,151 on May 1. On-chain data shows that a slowdown in Bitcoin demand growth and increased open short positions may be responsible for the latest drawdown, and it’s possible that new lows will be in store for BTC.CryptoQuant data shows that demand from permanent holders fell by 50% in April, from over 200,000 BTC in late March to about 90,000 BTC.Bitcoin demand from accumulated addresses.
“Bitcoin whale demand growth peaked at a monthly growth rate of 12% in late March and has now slowed down to 6%.”The analysts also said that the slowdown in Bitcoin demand was evinced by declining purchases from spot ETFs in the U.S., which also added to the sell-side pressure. Another metric that the on-chain data analytics firm used to explain the slowdown in Bitcoin demand was the “traders’ unwillingness to pay more to open long positions” as sell orders outpace buy orders.Bitcoin’s funding rate has dropped to a year-to-date low, indicating traders’ unwillingness to “pay as much as before to open long positions.”
CryptoQuant analysts set the lower target within the $55,000 to $57,000 demand zone, which is “10% below the current cost basis of traders of $63,000.” Traders’ cost basis has been known to offer support for prices during bull markets.For popular analyst Scott Melker, $52,000 is as low as the BTC price can go in the short term. Melker“This is still only a 23% correction, very shallow for a bull market and consistent with other corrections on this run.
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