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Key Takeaways
Is a BTC supply shock imminent?
Despite the dwindling exchange reserves, a supply shock was not nearby, since market sentiment remained muted and sellers remained in control.
Are there any signs of recovery for Bitcoin?
The market vs realized price showed the current correction is likely to conclude soon, and the BTC apparent demand turned positive after a month.
Bitcoin [BTC] showed strong on-chain signs and healthy, confident miners.
Recently, AMBCrypto explored how key metrics such as Exchange Supply Ratio and MVRV reflected accumulation and Bitcoin strength, which could see the $115k level challenged once again.
The rising hash momentum score reflected stable network conditions and miner confidence. The BTC Exchange Reserve was at 2.387 million coins, a figure not seen since 2018.
Together, these were signals that signaled bullishness for the leading crypto, but the macro conditions did not seem right to send a crypto market rally yet.
The extreme slide in Exchange Reserves brought up a pertinent question. Is a supply shock imminent? Will rising demand and falling supply send prices skyrocketing?
Positive apparent demand for Bitcoin
Source: CryptoQuant
The positive Apparent Demand in recent days signaled that new buying is absorbing more supply than what is being created by miners, or by the selling of long-term dormant coins.
This metric had been negative in October and the first week of November.
Source: CryptoQuant
The Market vs. Realized Price Gradient was below the -1 standard deviation, at press time. In these conditions, there is a high likelihood that the price correction will conclude.
A week ago, the oscillator was near the -2 STDV, a sign of a potential market bottom.
Sell pressure still has the upper hand
Source: CryptoQuant
On the other hand, the short-term holder P&L metric showed that more BTC was being sent to exchanges at a loss than at a profit. This has been the case since the second week of October, when the 10/10 crash occurred.
The STH selling pressure contributed to the bearish market sentiment, as it kept prices down and made a recovery more difficult. But it was not just STHs selling.
Source: CryptoQuant
The Buy/Sell Delta has been skewed in favor of the sellers since mid-October. The buyers were in control from November 2024 to January 2025, but since then, they have not been able to gather such dominance.
The bullish on-chain signals were contrasted by the short-term holder panic and the overall skew toward sell pressure as long-term holders also booked profits.