Bitcoin Demand Hits Rare Extreme, Weighing on Recovery Prospects

Bitcoin's demand structure has taken a sharp turn for the worse, with a rare extreme reading indicating potential instability ahead. According to CryptoQuant, the combined growth of spot and perpetual futures demand has fallen to -650,000 $BTC, a level only reached three times since 2019.

This downturn extends beyond leveraged traders and into organic market demand, suggesting that weakness is now widespread in the market. Historically, similar contractions have preceded major periods of instability, including the March 2020 crash and the 2022 bear market.

As a result, Bitcoin faces a similar test, with fewer spot buyers entering and derivatives exposure shrinking. This reduces the market's capacity to absorb fresh selling pressure, making it vulnerable to volatility.