Bitcoin’s price risks further decline amid persistently weak demand and liquidity, according to a Cryptoquant report released on Wednesday.
Bitcoin Faces $86K Threshold as Demand, Liquidity Woes Persist: Report
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Cryptoquant Warns of Bitcoin Downturn Amid Historic Liquidity Slowdown
In a Feb. 19, 2025 report, Cryptoquant researchers warned bitcoin ( BTC) could drop to $86,000 after hitting a one-month low of $93,000, citing deteriorating demand and liquidity conditions. The asset’s apparent demand growth fell 75% from 279,000 BTC on Dec. 4, 2024, to 70,000 BTC by mid-February 2025, according to the firm’s data.
This decline follows a post-U.S. election surge in late 2024, with analysts attributing the slowdown to inflation concerns, potential import tariffs and possible selling pressure linked to FTX creditor repayments. Bitcoin exchange-traded fund (ETF) inflows have also reversed, with daily U.S. ETF purchases plummeting from +18,000 BTC in early November 2024 to -1,000 BTC, Cryptoquant’s analysts reported.
Historically, the researchers said, sustained price rallies align with accelerating ETF demand, but current levels suggest market sentiment remains bearish. Excluding Grayscale’s GBTC, ETF holdings have stagnated since late 2024, further showing the glaring weakened institutional participation. Network activity, a key indicator of blockchain usage, has also deteriorated to yearly lows.
The analytical firm’s Bitcoin Network Activity Index fell 17% from its November 2024 peak to 3,658, dipping below its 365-day moving average for the first time since July 2021. The index tracks metrics like active addresses and transaction volumes, with the current slump signaling reduced user engagement. To add more fuel to the fire, stablecoin liquidity expansion — a critical driver of crypto rallies — has also stalled.
While the total stablecoin market cap surpassed $200 billion, its 60-day growth rate collapsed 92% from $20.4 billion in December 2024 to $1.5 billion. Cryptoquant analysts emphasized that renewed stablecoin inflows are essential to reignite bitcoin’s upward momentum. U.S. spot demand too has weakened considerably, per Cryptoquant’s Inter-exchange Flow Pulse.
Bitcoin transfers to Coinbase, often tied to bullish U.S. trading activity, slowed a great deal and crossed below their 90-day moving average (MA) — a pattern historically preceding price corrections. The report concludes that bitcoin’s realized price band of $86,000 is a critical support level. The onchain analytics and intelligence firm cautioned that without improved demand or liquidity, BTC prices may test this threshold, extending its downward trend.
