• Bitcoin’s lack of demand can be attributed to its network usage and its 24-hour trading volume has seen a 1.75% decrease.
• CryptoQuant analyst, Cauceconomy has opined that expecting a return of the Bitcoin [BTC] bull market might be too hasty due to the lack of demand.
• Cauceconomy pointed out that there was usually a notable breakout during the bear market before the bull season in previous cycles, which is not seen in the current momentum displayed by BTC.
The cryptocurrency market has been on a surge since the beginning of 2023, with Bitcoin [BTC] leading the pack. After a spectacular run in the first ten days of the year, investors were expecting the king coin to break out of its bearish slump from the previous year. However, despite the impressive run, Bitcoin’s demand has been quite underwhelming, raising questions on whether the bull market will return.
To help answer this question, CryptoQuant analyst, Cauceconomy has assessed the condition of the Bitcoin demand. According to his publication on the crypto data insight platform, Bitcoin’s lack of demand can be attributed to its network usage. This is because each block confirmation translates to increased daily transactions. However, that has not been the situation lately as miners have not necessarily been profitable to increase productivity by confirming more blocks. Hence, the trading volume has been repressed. According to CoinMarketCap, the BTC 24-hour trading volume was a 1.75% decrease at press time. This aligned with the analyst’s reference to a dip in transactions on the Bitcoin network.
Besides, Cauceconomy backed up his opinion by citing the historical trend. He pointed out that there was usually a notable breakout during the bear market before the bull season in previous cycles, but the current momentum displayed by BTC has shown nothing of such. The analyst said, „For us to have growth in the fundamentals of the network, we will need to see greater demand for trading and, consequently, higher fees for daily transactions. At this time, we haven’t had that breakout yet.“
The CryptoQuant analyst concluded by saying that a short term retreat could be likely depending on the CPI outcome as supply in profit spikes. He emphasized that expecting a return of the Bitcoin bull market might sound too hasty despite the king coin resurgence above $17,000.
All in all, while the cryptocurrency market has seen an impressive surge in the first ten days of the year, the lack of demand for Bitcoin has raised questions on whether the bull market will return. This has been backed up by CryptoQuant analyst, Cauceconomy, who has assessed the condition of the Bitcoin demand and highlighted the lack of a notable breakout in the current momentum displayed by BTC. Therefore, it might be too early to expect a return of the Bitcoin bull market.