Recent data indicates that Bitcoin's (BTC) momentum is weakening, linked to ongoing profit-taking by investors and declining demand.
Declining Demand for Bitcoin
According to the weekly report from CryptoQuant, Bitcoin has transitioned from an 'Extra Bullish' to a 'Bullish Cooldown' phase. Demand for Bitcoin has dropped from a peak of 174,000 BTC in July to 59,000 BTC currently. Institutional buyers have also slowed their purchasing volumes, even though they are still buying.
Profit-Taking by Large Investors
Large investors, known as 'whales', continue to take profits. Since July 4, they have realized at least $74 billion in profits. On August 16, new whale investors realized up to $2 billion in gains. This has coincided with the lowest inflow into funds in four months.
Support at $110,000?
At the time of writing, Bitcoin's price hovered around $116,000, but with reduced downside risk. CryptoQuant analysts believe the leading digital asset may find support near $110,000, which often acts as a support level during bull cycles. Traders' unrealized profit margin is close to zero, potentially impacting selling decisions.
In light of the current market conditions, Bitcoin's declining demand and profit-taking may limit its future growth.
