Bitcoin demand hits -170,000 BTC as miners refuse to capitulate

A rare on-chain divergence has emerged: Bitcoin spot demand is cratering while miners show no signs of selling pressure.

Bitcoin spot demand fell toward -170,000 BTC on July 20, on-chain data shows, while the Puell Multiple reached its highest cycle bottom on record.

"The data points to still-too-pessimistic market-wide positioning that continues to deprive BTC of the resources it needs to durably break out of this consolidation zone," Darkfost, an analyst at CryptoQuant, said.

The demand reading marks a sharp reversal from a brief recovery earlier this month and extends a trend of weakening buyer activity across the market. The Puell Multiple, which measures miner revenue relative to its 365-day moving average, hit a cycle-bottom level that exceeds any prior cycle — suggesting miners are not capitulating despite the price drawdown. Bitcoin traded at about $64,200 as of 14:00 UTC, roughly flat on the day and up 3% over the past week, with about $18 billion changing hands in the prior 24 hours, CoinGecko data shows.

The divergence creates an unusual setup. Historically, when demand collapses while miners hold, the market either faces a supply squeeze if buyers return or a deeper correction if demand continues to weaken. The conflicting signals leave bitcoin caught between a resilient supply side and a demand base that has yet to re-engage.

Stablecoin Liquidity Adds to the Pressure

The demand weakness is compounded by a drain in exchange-based buying power. Binance and Bybit recorded combined stablecoin outflows of nearly $2.3 billion over the past 30 days, according to CryptoQuant data published July 20. Binance accounted for about $1.55 billion of the decline, while Bybit lost roughly $786 million. The withdrawals shrink the readily available capital for spot purchases on two of the largest centralized exchanges, reducing the market's capacity to absorb sell pressure or sustain upward moves.

Part of the outflow connects to regulation. Binance recorded $1.8 billion in net USDC outflows during the second quarter after failing to secure a Markets in Crypto-Assets license in Europe, Blockchain Reporter noted. Total USDC supply in circulation contracted by 5.5% over the same period, equivalent to roughly $4.3 billion in net redemptions, indicating that some capital left the crypto ecosystem entirely.

Macro Crosscurrents Keep Bitcoin Rangebound

Bitcoin has spent roughly 165 days testing the $60,000 region. A brief rally above $80,000 in May failed to hold as buyers could not sustain sufficient demand pressure. The current consolidation sits against a mixed macro backdrop: Brent crude rose as much as 4% to $91.42 a barrel on escalating US-Iran strikes, reviving inflation concerns that had eased on soft US price data earlier this month. Meanwhile, a semiconductor selloff triggered by Moonshot AI's Kimi K3 model release continued to ripple through global equities, adding a second headwind for risk assets.

On the institutional side, US spot bitcoin ETFs logged two consecutive weeks of inflows totaling $273 million, CryptoSlate reported. That figure replaces only about 3% of the more than $8 billion withdrawn from those products in recent weeks, suggesting ETF demand alone is insufficient to offset the exchange-level liquidity drain.

The next test for bitcoin is whether demand can recover from current levels. A sustained reversal in stablecoin inflows may be required before the asset can mount a durable move above $64,000, where it currently faces resistance. On the downside, the $60,000 level has held through multiple tests since February, making it the key support to watch. The Puell Multiple at a record cycle bottom suggests miners expect higher future prices, but the demand side tells a bearish near-term story — and until that gap closes, bitcoin remains stuck between conflicting signals.

This article is for informational purposes only and does not constitute investment advice.