Key Takeaways
Bitcoin’s demand dipped in the U.S. and Korea despite ATH; institutions accumulate via the Options market. Retail selling remained modest. If demand recovers, BTC may retest $123K; otherwise, $115K support could break.
With Bitcoin [BTC] hovering near its ATH, some investors are becoming cautious, while others are taking a step back from the market.
Bitcoin’s price has hit record highs, but demand is lagging—raising concerns that the rally may not be sustainable.
Could that be a cause for concern?
Bitcoin’s demand dips in the U.S. and Korean markets
According to CryptoQuant, Bitcoin demand from U.S. and Korean investors has dropped sharply, despite prices hovering near all-time highs.
Despite the recent rally to $123,000, the Coinbase Premium Index has remained at June levels, with no significant increase.
Source: CryptoQuant
Typically, a stagnating or declining Coinbase Index indicates that investors are either selling or not buying as much Bitcoin.
Therefore, the Index’s sustained decline, despite rising prices, suggests increased profit-taking or lack of buyer momentum.
Additionally, another possibility is that U.S. investors may be waiting for prices to decline before re-entering the market.
Source: CryptoQuant
Similarly, a similar market behavior emerged among the Korean participants. As such, the Korea Premium Index also declined, signaling a significant dip in demand on the Korean market.
When these two metrics decline in tandem, it indicates that when investors exit at lower prices, they also lack opportunities. In this case, they choose to sit on the sidelines, since retailers may seek to buy at a discount.
Institutions are not sitting by
Interestingly, while small-scale investors are avoiding the market, Institutions are actively participating.
At press time, Options Volume soared 125% to $5.21 billion while Options Interest jumped 4.6% to $51.9 billion as per CoinGlass.
Source: CoinGlass
When the Options market records a significant upsurge, it signals growing institutional participation, a clear sign of increasing smart money accumulation.
This is because large entities, especially institutions, primarily dominate Options.
Who’s selling then?
Significantly, although selling activity continues, it remains minimal. According to Checkonchain, on the 22nd of July, Long Term Holders offloaded 10,500 BTC, while STH offloaded 8,300 BTC.
Source: Checkonchain
In total, the market recorded 18.8k BTC in sales, signaling a growing appetite to exit positions or realize profit.
Any cause for concern?
According to AMBCrypto’s analysis, while demand for Bitcoin has declined in the U.S. and Korean markets, there has been no panic exit.
On the contrary, institutions are more active than ever, and they continue to accumulate BTC.
Therefore, the recent selling from STH and LTHs is a healthy market repositioning and doesn’t signal mass selling. In that case, there’s no cause for alarm, and Bitcoin’s uptrend is likely to resume after recent cool-off.
That said, if demand in both markets records even a moderate recovery, Bitcoin will retest $123,000 and attempt another high.
However, if the current trend persists, a further market correction will follow, with BTC breaching $115k support.