Four On-Chain Indicators Show Weak Demand, Bitcoin Recovery May Face Resistance

Gate News Report: Since the beginning of this year, Bitcoin (BTC) price volatility has increased, influenced by geopolitical tensions and macroeconomic pressures, with a decline of about 4% over the past week. On-chain analysis shows signs of weakening demand for Bitcoin, suggesting a potential challenge to recovery.

Glassnode’s Accumulation Trend Score is approaching zero, indicating dispersed or inactive activity among different wallet groups. The company notes that small and medium wallets tend to diversify their investments during market downturns, unlike in Q4 2024 when various wallets were actively accumulating, driving prices higher. Santiment’s data shows that whale activity remains unusually calm, with daily transactions over $100,000 dropping to 6,417, and transactions over $1 million falling to 1,485, the lowest in the past two years. Analysts believe this reflects investor caution as they await clearer policies and the end of conflicts.

On the fundamentals side, Bitcoin Vector points out that the Bitcoin fundamental index continues to decline, indicating a state of stabilization without strong support, rather than healthy consolidation. CryptoQuant analyst Maartunn also observed a decrease in network activity index, signaling overall demand remains weak. Current on-chain conditions suggest Bitcoin’s upward movement is increasingly dependent on capital flows, short covering, or external catalysts rather than intrinsic network strength.

Overall, four on-chain indicators signal caution, and Bitcoin’s short-term recovery may be limited. Unless wallet participation recovers or external factors drive momentum, resistance levels remain significant. Investors should monitor policy developments, geopolitical dynamics, and market capital inflows to assess whether prices can break through current resistance zones.