Bitcoin slipped below $63,000 even after supportive US inflation data, as CryptoQuant pointed to weak spot demand rather than macro conditions as the real drag. Oil prices and Treasury yields also climbed, adding further pressure. Bitcoin's 365-day running return on investment has now turned negative.
Bitcoin failed to rally after a week of encouraging economic data and instead slipped below $63,000.
Spot demand dries up despite good data
The July CPI report came broadly in line with expectations, briefly pushing Bitcoin to $64,400 before it gave back the gains. The subsequent PPI report was even more encouraging: producer prices stayed flat month-over-month against expectations of a 0.2% increase.
CryptoQuant said Treasury yields declined and US equities posted gains, a combination that should have provided some relief for risk-on assets. But the firm's analysts said the explanation may have less to do with the macro environment and considerably more to do with a simple problem: Bitcoin buyers are nowhere to be seen in the spot market.
The Coinbase Premium Index has stayed almost entirely negative for three months and now sits at around -0.1%. CryptoQuant added that the seven-day average spot trading volume across major exchanges dropped from nearly $9 billion in late June to under $4 billion on August 12, a 55% decline that came even as BTC's price recovered 8% over the same stretch.
Oil and yields add to the pressure
Bitcoin's slide has coincided with moves elsewhere in markets. WTI crude climbed above $82 a barrel. The yield on the US 10-year Treasury advanced to 4.660%, a combination that weighed on risk assets.
A year of holding Bitcoin now shows a loss
Bitcoin's 365-day running return on investment has fallen to about 0.514, meaning the asset is worth roughly 51% of what it was a year ago and making the trailing 12-month holding period unprofitable. A reading below 1 has historically appeared during some of the market's worst stretches, including the 2014-2015, 2018-2019 and 2022 bear markets.
The asset is currently trading at about $62,900, below its short-term moving averages between $63,400 and $63,900, its 100-day moving average of $66,500, and its 200-day moving average of $71,800. The daily RSI has dropped to about 42.5, below its signal average of about 49, leaving sellers with the upper hand.
Sources: CryptoPotato, CoinDesk (snippet-based), U.Today
Trading involves risk.
Risk Disclaimer
