Cryptoquant report finds weak Bitcoin demand despite recent surge

A new report from Cryptoquant has revealed that while comments from Federal Reserve Chairman Jerome Powell sparked a surge in U.S. Bitcoin (CRYPTO:BTC) demand last week, overall global demand for the cryptocurrency remains subdued. 

The report highlights mixed signals in the market following Powell's remarks on potential interest rate cuts. 

The report notes that Bitcoin's price surged by over 6% to $65,000 following Powell's comments, reflecting heightened U.S. investor demand. 

This increase was evident through the growing price premium on Coinbase, a U.S.-based exchange. 

Additionally, Cryptoquant observed that Bitcoin is flowing back into U.S. exchanges from international platforms, a trend historically associated with upward price movements. 

The report also points to the Inter-exchange Flow Pulse (IFP) indicator, which tracks Bitcoin flows between exchanges. 

The IFP indicator is trending upwards, indicating an influx of Bitcoin into Coinbase in response to the price premium and higher demand in the U.S. 

An upward trend in this indicator typically correlates with rising Bitcoin prices. 

Despite this localised increase, Cryptoquant's data suggests that global demand for Bitcoin has remained weak. 

The report reveals that, although open interest in the perpetual futures market rose by nearly 10,000 BTC following Powell's remarks, broader demand growth has been negative in recent weeks. 

Since April, when Bitcoin traded at $70,000, overall demand has declined significantly, contributing to price stagnation. 

The analysis also highlighted low levels of profit-taking during the recent rally, with realised profits amounting to $536 million—much lower than profits at earlier market peaks this year. 

This suggests that the current rally has not yet reached its local top. 

However, the report warns that unless there is a reversal in the declining demand trend, the market may struggle to sustain further price gains. 

At the time of reporting, the Bitcoin price was $59,591.38.