Bitcoin at Pivotal Point as Bear Market Beckons: Onchain Data

At its current price of $57,700, bitcoin rebounded from last week’s low of $53,600. However, it is still in a technical downtrend since reaching its all-time high of $73,800 in March. The cryptocurrency has formed successive lower peaks at $71,300 and $63,900.

According to information from CryptoQuant, the profit and loss index indicates that a significant drop or the beginning of a prolonged bear market might be imminent. The index has been close to its average over the past 365 days. Past occurrences of this crossover have signaled the start of steep declines in May and November 2021.

The Bitcoin indicator from CryptoQuant is nearing a significant threshold, which typically signals the beginning of a bear market for the cryptocurrency.

The stagnant expansion of Tether’s (USDT) market capitalization indicates that a potential rally could be challenging to achieve. Historically, crypto market recoveries have been linked to an increase in stablecoin liquidity, according to CryptoQuant. So, the absence of such growth might hinder a significant price surge for USDT.

Large-scale Bitcoin investors, or “whales,” have been accumulating more coins during this market dip. In fact, they’ve added a notable 6.3% to their holdings in the last month – the most significant increase since April 2023.

It seems that Germany’s forceful sale of the confiscated 50,000 Bitcoins from Movie2k, which took place in January, is nearing completion. Almost all of these digital assets have been sold, leaving Germany with few Bitcoins remaining.

As a crypto investor, I believe that the approval of an Ether Exchange-Traded Fund (ETF) in the U.S. and the persistent growth of U.S. stock indices are positive indicators for the crypto market in 2024. Historically, bitcoin has shown correlation with the stock market. Thus, these bullish factors signal that the upside trend will continue despite temporary exhaustion signs.