As a seasoned crypto investor with a few bear markets under my belt, I’ve learned to pay close attention to on-chain metrics when assessing the health of the market. The latest CryptoQuant report offers some promising signs that the crypto winter may be coming to an end and that we could be on the cusp of another bull run.
Market analysts at the crypto intelligence platform, CryptoQuant, have identified key on-chain indicators suggesting that Bitcoin‘s (BTC) price may have reached its lowest point and that the cryptocurrency market could be preparing for a rebound.
In the most recent CryptoQuant report for this week, some noteworthy indicators were highlighted for close observation. These include increasing bullish sentiment, heightened demand for Bitcoin, and accelerated expansion in stablecoin liquidity.
Higher Bullish Momentum
CryptoQuant’s Bitcoin Bull-Bear Market Cycle indicator currently signals that the crypto market has been in its least bullish state since March 2023, when the United States banking crisis occurred.
At present, Bitcoin is trading around $61,000, having dipped as low as $58,500 this week – a level not seen in a month. To bounce back, the market requires a surge of bullish energy. As such, it’s essential for CryptoQuant’s Bull-Bear Market Cycle indicator to climb above its 30-day moving average.
As a crypto investor, I’ve observed that for Bitcoin prices to bounce back, its demand growth needs to pick up pace and match the levels witnessed during the first quarter of the year. Although there was some improvement in demand after May, it remains considerably slower than the robust rate we experienced earlier in the year when U.S. spot Bitcoin exchange-traded funds (ETFs) were introduced.
As an analyst, I have observed that the buying activity of permanent Bitcoin holders, who consistently keep their investments in Bitcoin, can indicate a potential price bottom for the leading digital asset. Presently, these investors are acquiring around 72,000 BTC per month. This is significantly lower than the quarterly average of 160,000 BTC we saw in Q1 and only slightly higher than the monthly rate of 68,000 BTC recorded in May. For the Bitcoin price to resume its upward trend, much more robust buying from this cohort is required.
A Potential Major Correction
As a seasoned crypto investor, I’ve closely observed Bitcoin’s price movements and have identified a critical support level based on Metcalfe price valuation bands. This level sits at $56,000. In the past cycle, this price point marked both resistance and top levels. If Bitcoin were to dip below this support level, it could initiate a significant correction that might further erode the market’s value. Consequently, whether Bitcoin has reached its bottom or not could hinge on whether it manages to hold above the $56,000 mark.
Furthermore, the shift of traders’ on-chain unrealized profits into positive territory may indicate approaching rallies. A surge in Bitcoin transfers from other digital platforms to Coinbase hints at a rise in American investor interest in Bitcoin, typically linked to price growth.
As a researcher studying the cryptocurrency market, I have observed that a significant increase in stablecoin liquidity, specifically in the case of Tether (USDT), over a 60-day period, is a clear sign of capital inflows into the market. This influx of funds is an essential factor in driving prices upward.
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2024-06-30 11:34