Bitcoin's Trend Shifts from Bullish to Cooling Down: Selling Phase Persists as Market Desire Wanes (CryptoQuant)

In recent days, the world's leading digital asset, Bitcoin, has experienced a cooling down in its momentum. This shift has been observed through various indicators and market trends.

According to CryptoQuant analysts, Bitcoin may find support near the significant level of $110,000. This prediction is based on the current market conditions, which tally with the ongoing price decline.

One of the key indicators of this cooling down is the decrease in demand for Bitcoin. The demand, which peaked at 174,000 BTC in July, has since fallen to 59,000 BTC currently. This broad-based decline in demand growth suggests fading momentum, which likely contributed to the recent price correction.

Another significant factor is the decrease in inflows to Spot Bitcoin exchange-traded funds (ETFs). Over the past 30 days, net purchases have hovered around 11,000 BTC, marking the lowest inflows in four months. This decrease in institutional investment could be a sign of reduced demand for Bitcoin.

The CryptoQuant Bull Score Index, which moved from the "Extra Bullish" to the "Bullish Cooldown" phase after Bitcoin rallied past $120,000, also reflects this shift. Furthermore, the Trader On-chain Realized Price, which is currently $110,000, often acts as support during bull cycles.

Despite this cooling down, it's important to note that the highest recent Bitcoin profits have been realised by institutional investors, corporate treasury buyers, and inflows into Bitcoin ETFs. However, recent data shows that institutional Bitcoin buyers are accumulating less than before. For instance, the business intelligence firm Strategy, the lead BTC buyer, has seen its purchases decrease from 171,000 to 27,000 over the past 30 days.

The market recorded its largest daily profit so far this year ($9 billion) on July 4. Since then, new whale investors have realised at least $74 billion in profits. On August 16, new whale investors realised up to $2 billion in gains.

However, the Trader On-chain Realized Price goes to zero at the point of unrealized profit margin, discouraging more selling. This could potentially prevent a further downward trend in the near term.

Without a return to strong demand signals, further upward momentum may remain limited in the near term. Current market conditions suggest that Bitcoin may consolidate around its current price of around $116,000, with potential support near $110,000. Continued softness in demand could keep Bitcoin in this consolidation phase.

In conclusion, while Bitcoin's momentum has cooled down, the digital asset may find support near $110,000. However, without a return to strong demand signals, further upward momentum may remain limited in the near term.