Improvement in Bitcoin Supply-Demand Structure, but Physical Demand Remains a Challenge = Report

Improvement in Supply-Demand Structure Continues, but Physical Demand is Key

On the 7th, cryptocurrency research firm XWIN Research reported in a publicly available report on CryptoQuant that its analysts have analyzed the supply-demand structure of Bitcoin (BTC). They noted that while inflows from ETF funds and purchases by large investors are progressing, the focus is on how much physical demand can absorb the supply.

The firm pointed out that while the supply-demand environment is showing an improving trend, whether it can clearly break above the $82,000 to $83,000 level will be a litmus test.

Inflows from Institutional Money and Purchases by Large Investors

The ETF holdings continue to increase, indicating that the absorption of BTC by institutional investors is steadily progressing. Purchases by large investors have also been observed, and a notable wall of buying demand has formed near the current price range.

On the other hand, Binance's BTC reserves have remained high, fluctuating between approximately 685,000 BTC and 687,000 BTC, with the seven-day moving average of net inflows to exchanges increasing to about 593 BTC. At the same time, the inflow of stablecoins to exchanges is also on the rise, indicating a situation where both potential selling pressure and buying capacity are expanding.

Exchange Reserves and Derivative Trends

In the derivatives market, some signs of a reset have been observed. The funding rate has turned negative, and open interest (OI) decreased from about $27.5 billion to about $25.7 billion between September 4 and 5.

However, Binance's BTC open interest has recently surpassed $10 billion, reaching a six-month high, indicating that the rebound cannot be solely attributed to physical demand.

Indicators showing psychological improvement, such as the short-term holder's cost-basis ratio (SOPR) rising above 1 again, have also been observed, along with confirmation that some old coins mined around 2010 have moved.

The firm stated that while the supply-demand structure itself is improving, whether physical demand can absorb the supply and clearly break above the $82,000 to $83,000 level will be a critical turning point for the market's direction.