Price rebound vs. weak on-chain demand: what's missing for Bitcoin to return to $100,000

Bitcoin performed well at the start of the new year, briefly breaking through $93,000 on January 5th. However, analysts point out that behind this rebound lies a problem: on-chain demand remains weak. CryptoQuant analyst caueconomy recently stated that even if Bitcoin’s price returns above $93,000, signs of on-chain activity recovery are not obvious. To truly reach $100,000, stronger on-chain demand support is needed. This suggests that the current price rebound may face limited upward momentum.

The Contradiction Between Price Rebound and On-Chain Demand

According to the latest data, Bitcoin’s current trading price is approximately $92,795, down 0.55% in the past 24 hours, but with a 7-day increase of 4.77%, indicating a clear upward trend recently. From a low of $87,000 to near $93,000, the rally has been nearly 7%, which looks promising.

However, analysts warn that the quality of this rebound has hidden risks. Amid mixed market sentiment and low trading volume, on-chain activity shows no solid signs of improvement. This indicates that the price increase is mainly driven by sentiment rather than fundamental support.

Market Signal Confusion

The current market presents a contradictory state:

Positive signals include: Coinbase premium gap returning to zero, indicating US institutional investors are resuming active buying; the Crypto Fear & Greed Index rising from extreme fear at 29 to 40, showing market sentiment easing; the BTC long-short ratio remaining above 1.0, with traders generally maintaining a net bullish bias.

Negative signals include: Bitcoin spot ETF experiencing record outflows, indicating instability in institutional funds; although 24-hour trading volume reached $5.367 billion, it still appears subdued relative to market capitalization.

Can the End of Holidays Change the Situation?

Analysts mention a key variable: the holidays have just ended. During the New Year holiday period, many investors reduced trading, directly leading to declines in on-chain activity and trading volume. As investors gradually return to the market after January 6th, on-chain activity may rebound.

This is an important observation. If on-chain trading activity truly recovers after the holidays, it would suggest that the previous weakness was only a temporary seasonal phenomenon. But if on-chain demand remains weak, it indicates a more fundamental issue with market participation.

Conditions for Returning to $100,000

Relying solely on sentiment to push Bitcoin back to $100,000 from the current $92,795 is not enough. According to analysts, several conditions need to be met:

• Substantial improvement in on-chain trading volume and activity, not just a price rebound
• Bitcoin inflows into exchanges need to stay relatively low, indicating holders are not eager to sell
• Increased market participation, especially from small and medium investors, not just large players

Currently, Bitcoin’s market cap of $1.85 trillion accounts for 58.20% of the total cryptocurrency market cap, maintaining a strong dominance. However, whether this market cap can continue to grow depends on whether trading activity and participation can be sustained at sufficient levels.

Summary

Bitcoin’s rebound from $87,000 to $92,795 shows resilience, but the sustainability of this rally warrants attention. Weak on-chain demand is the biggest current constraint. The recovery of on-chain activity after the holidays will be a key indicator of whether the market is truly strengthening.

From an institutional perspective, the involvement of US banks and wealth management firms provides long-term support. However, in the short term, the market still needs more substantial trading activity to support further price increases. Investors are advised to shift focus from price alone to on-chain data, as that reflects genuine demand.