Bitcoin Price Recovery Falters Amid Decline in Demand Indicators

The recent price recovery of Bitcoin has come to a halt, with prices pulling back to $77,500 after failing to break through the 200-day simple moving average.

CryptoQuant's latest report highlights that demand indicators have weakened, which may explain why the rally failed to gain momentum. The firm notes that all three factors that supported the April and early May rally - leveraged futures buying, spot demand, and U.S. ETF inflows - have now declined.

The Bull Score Index, a metric used by CryptoQuant to gauge market sentiment, has fallen significantly from 40 to 20, indicating an extremely bearish trend.

Additionally, the Coinbase bitcoin premium has remained negative throughout much of the May rally and subsequent correction, suggesting weaker U.S. demand.

The decline in demand is further corroborated by data showing that U.S. spot bitcoin ETFs have turned into sellers, with outflows reaching $979.7 million in the week ended May 19.