- BTC has made significant gains over the past day, rising 2.08%.
- Despite recent gains, Bitcoin remained stuck in an ongoing bear phase.
Over the past 24 hours, Bitcoin [BTC] has made significant gains, rising from a local low of $55554 to $58038 at the time of writing. This represented an increase of 2.08% compared to the previous day.
These gains are accompanied by weekly gains of 1.83%, rebounding from a sharp decline to $52546.
These current market conditions raise the question of whether BTC will experience a sustainable recovery or just a correction before a further dip. Market sentiment remains bearish as analysts see a potential dip.
This sentiment is shared by CryptoQuant analysts who argue that BTC is stuck in a bear phase, citing the 365-day moving average and the MVRV.
BTC is stuck in bear phase
According to CryptoQuantthe bull-bear market cycle has remained in the bear phase for the past two weeks.
Since the last time BTC traded at $62,000, the crypto has remained in a bear phase, falling to a low of $52,000 during this period.
As long as the economy remains in this phase, a significant rally remains unexpected with potential for further correction.
Source: CryptoQuant
Second, the analysis found that BTC’s MVRV ratio has remained below its 365-day moving average since August 26. Such a scenario indicates a potential for a further decline, as seen in May 2021.
During the 2021 cycle, BTC fell 36% in two months – this happened again in November 2021.
Source: CryptoQuant
Another market indicator that signals a bearish trend is the SOPR of the long-term holders. According to CryptoQuant, long-term holders’ SOPR has declined since July, with LTH releases having lower profit margins.
When LTHs issue at lower profit margins, it indicates a lack of new demand for BTC. So BTC will only show a buy signal when the LTH SOPR charts start an uptrend move.
Source: CryptoQuant
Finally, BTC has decoupled from gold as its prices have fallen while gold prices have soared and reached new highs. So the correlation between gold and BTC has become negative, with the price of gold rising as BTC fell.
This suggested that investors became risk averse as they turned to traditional assets as a safe haven and thus avoided volatile assets.
Source: CryptoQuant
What Bitcoin’s Charts Suggest
Looking ahead, both Bitcoin’s LTH-SOPR and STH-SOPR have fallen over the past week. When the LTH-SOPR falls, it suggests that long-term holders were increasingly selling their crypto at a loss.
When the STH-SOPR falls, it indicates that short-term bond holders are also selling at a loss, due to FUD and fears of further downside.
Source: CryptoQuant
Read Bitcoin’s [BTC] Price forecast 2024–2025
Moreover, Bitcoin’s NRPL has turned from positive to negative, indicating capitulation. This meant that investors had lost confidence in the crypto direction and were selling despite their losses.
Based on this analysis, BTC’s bear phase will therefore continue and prices will likely experience continued corrections. So, if the bears continue to dominate, Bitcoin will fall towards the $56,000 support level.
Source: CryptoQuant