Bitcoin Spot Demand Plummets as Market Vulnerability Grows

Bitcoin's spot demand has weakened significantly in recent weeks, according to CryptoQuant. The analyst ScenarioX notes that Bitcoin's 30-day Spot Demand fell back to nearly -170,000 BTC after recovering to around -80,000 BTC in early July.

This divergence between price stability and weakening spot buying activity leaves the market vulnerable if selling pressure returns, per ScenarioX. The analyst argues that Bitcoin's recent resilience has not been driven by stronger spot demand but rather easing short-term selling pressure and short covering in the derivatives market.

Derivatives activity has helped prevent a deeper decline, but futures-driven demand alone is not enough to sustain a long-term bullish trend, said ScenarioX. Without meaningful spot buying, the market could face a sharp downside move if spot investors begin selling again.