CryptoQuant: BTC supply-demand dynamics are shifting, but a strong recovery still faces challenges

On October 19, CryptoQuant's latest analysis indicates that while Bitcoin has support, its recovery is uneven. First, regarding exchange reserves, they rose from about 2.67 million BTC in early October to about 2.68 million BTC, still far below January levels. Low reserves do not necessarily mean supply is continuously shrinking; transfers may reflect custody changes, and the increase itself does not prove selling. Second, spot demand recovery has stalled, with 30-day spot demand turning negative again after briefly approaching zero. Perpetual contract demand is positive, supporting overall demand. Finally, whale behavior is diverging: addresses holding 100–1000 BTC still saw net accumulation over the past 60 days, but below the late-September peak; the 1000–10000 BTC group's net reduction is approaching zero; and the over-10000 BTC group is negative. Accumulation is not broad-based.

CryptoQuant believes that conditions supporting a Bitcoin bottom still exist. To achieve a solid recovery, sustained spot demand support is needed, buyers must be able to absorb the BTC flowing back to exchanges, and accumulation should spread to more holding groups. Market expectations regarding the U.S. midterm elections and monetary policy must translate into actual buying. The key is whether rising prices can attract an expanding and sustained buyer base.