Institutional demand for Bitcoin is now more than five times higher than the amount being produced daily by miners. According to Charles Edwards, this kind of imbalance has historically preceded strong price rallies.
In a May 4 update, Edwards explained that whenever this demand to supply ratio has reached similar levels in the past, Bitcoin has delivered an average gain of twenty four percent over the following month. Based on current prices, that projection would place BTC near ninety six thousand dollars.
What the Data Reveals
The five hundred percent figure comes from comparing daily institutional purchases, largely driven by public companies and exchange traded funds, with the roughly four hundred fifty BTC mined each day since the 2024 halving event.
Edwards noted that previous occurrences of this level of demand were often followed by rapid price increases within days, with sustained gains over the following weeks.
Earlier today, Bitcoin climbed above eighty thousand dollars for the first time since January. Over the past twenty four hours, it has traded between seventy eight thousand and just over eighty thousand dollars, according to CoinGecko, and has gained about twenty percent over the past month.
The rally triggered significant liquidations, with more than one hundred sixty two million dollars in short positions wiped out within a day, based on data from CoinGlass. Trading activity also surged, with volume jumping ninety five percent to approximately thirty four billion dollars.
Other analysts are also leaning bullish, though with varying confidence levels. Trader Taiki Maeda suggested that MicroStrategy could purchase between two and three billion dollars worth of Bitcoin over the next two weeks through its STRC program, potentially accelerating buying pressure into mid May.
Meanwhile, analyst Ali Martinez pointed to a long term ascending trendline that Bitcoin has respected in multiple years, including 2017, 2018, 2020, and 2022. He believes the recent pullback to around sixty five thousand dollars may indicate that the market has already found its bottom.
Concerns Over Sustainability Remain
Despite the bullish outlook, some data suggests caution. CryptoQuant reported that April’s twelve percent price increase was driven mainly by activity in perpetual futures markets rather than spot demand.
The firm highlighted that Bitcoin’s apparent demand indicator, which tracks thirty day on chain spot buying, remained negative throughout the rally. This disconnect between rising prices and declining spot demand is often seen as a sign that gains are driven by speculation rather than strong fundamentals.
CryptoQuant also noted that a similar pattern appeared at the beginning of the 2022 bear market, raising concerns that the current structure could signal underlying weakness despite recent price strength.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
