Bitcoin has reclaimed the $78,000 level, revisiting a price zone it last reached on April 17 and again on April 22, after previously trading within the range on February 3.
This move has reignited bullish sentiment in the market, with expectations building around a potential push towards $80,000. However, underlying data suggests that the rally may not have the structural support typically seen at the start of sustained bull cycles.
Fractal pattern keeps the bull run in check
Historical behavior in the chain, especially the relationship between Bitcoin [BTC] short term holders (STH) and long term holders (LTH) remain a sign of caution.
Data from Alphractal shows that the realized price of STH remains above that of LTH. In previous market cycles, a confirmed bull run only occurs after the price realized by the STH falls below the LTH level – a transition that reflects stronger long-term accumulation and reduced short-term pressure.
This pattern has emerged consistently over multiple cycles, but has not yet formed into the current market structure. The persistent gap between the two measures suggests that bearish conditions may still linger beneath the surface.
Market analyst Joao Pedro noted that the market may need several more weeks before a clear transition out of the bear phase takes place. He added that the recent move could represent a lower high, leaving room for another leg down.
This bear market could last a little longer. At least another 5 to 6 months I believe.
First signs of a possible shift
Despite the lack of a confirmed bullish crossover, some indicators suggest conditions for a recovery could be developing.
The LTH-STH spent output profit ratio (SOPR) is on a downward trend and approaching the neutral threshold of around 1.0, while current levels are around 1.07. Historically, this range reflects a cool-down phase in the market, where profit-taking slows and selling pressure diminishes.
A drop below 1.0 has marked local bottoms in recent cycles and preceded stronger upward momentum. As a result, the market is in a transitional state, in which stability is emerging, but further negative consequences cannot be ruled out.
Weak Bitcoin Network Activity Calls for Caution
The fundamentals in the chain continue to diverge from the price action, adding to concerns about the sustainability of the rally.
Network activity has declined even as Bitcoin’s price rises, suggesting this move may be driven more by speculative demand than organic growth. Lower transaction activity and reduced user engagement often indicate weaker underlying support for price increases.
Data from CryptoQuant shows that the number of active addresses has fallen from approximately 663,000 on April 17 to approximately 620,000 in the past 24 hours. On a broader scale, activity is down from around 865,000 in February, reinforcing the downward trend in network participation.
This difference between price and on-chain demand increases the risk of Bitcoin trading above its fundamental value, increasing the likelihood of a correction before a more sustainable uptrend can manifest.
Final summary
- Bitcoin’s recovery of $78,000 has revived bullish sentiment, but this move lacks strong structural confirmation of a new cycle.
- A drop in SOPR below 1.0 could indicate a local bottom and stronger upside potential based on previous cycles.