The Current State of Bitcoin’s Market
The founder of CryptoQuant, Ki Young Ju, has declared that the bullish phase of Bitcoin (BTC) is over. In a recent post on X, Ju anticipates a period of 6 to 12 months characterized by bearish trends or sideways price movements. This shift comes in light of diminishing liquidity within the market, which is critical for sustaining price momentum.
Declining Liquidity Signals Trouble
Ju elaborated on his concerns in a Telegram message to CoinDesk, highlighting the necessity for new liquidity to rejuvenate the market. He noted that the on-chain realized market cap has stagnated, indicating a lack of fresh capital inflows. A striking example is the BlackRock IBIT, which experienced three consecutive weeks of outflows. Even with significant trading volumes nearing $100,000, Bitcoin’s price remained relatively stable. Ju emphasized that without new capital to counterbalance heavy selling, these conditions are a bearish indicator.
Key Indicators of Market Weakness
A recent report from CryptoQuant suggests a potential decline in Bitcoin’s price, possibly returning to the $63,000 mark. Analysts have pointed to critical valuation metrics such as the MVRV Ratio Z-score, which evaluates Bitcoin’s market value against its realized value to discern overbought or oversold conditions. The MVRV Z-score dipping below its 365-day moving average has historically signaled weakened price momentum, often preceding more substantial corrections or the initiation of bear markets.
Support Levels Under Scrutiny
Analysts from CryptoQuant have identified the $75,000 to $78,000 support level as crucial. The weakening demand for Bitcoin, evidenced by a slowdown in whale accumulation and net selling from U.S.-based spot ETFs, has intensified downward pressure on prices, raising concerns about the potential for a more severe price correction.
Broader Economic Concerns and Their Impact
These predictions align with insights from experts such as Joel Kruger of LMAX Group and David Duong from Coinbase Institutional, who have warned that ongoing weaknesses in U.S. equities—amid economic uncertainty and global tensions—could further exacerbate bearish sentiments in the cryptocurrency markets. Stagflation remains a looming concern, potentially complicating the economic landscape.
Market Sentiment and Predictions
According to Polymarket bettors, there is a 51% probability that Bitcoin will end the week within the $81,000 to $87,000 range, with a 31% chance that it will fall to $75,000 by the end of the month. Over the past month, Bitcoin has seen a decline of 15%, as reported by CoinDesk Indices, wiping out any gains made following the recent elections.
In conclusion, as the market faces these challenging conditions, investors and analysts alike are keeping a close watch on Bitcoin’s price movements and the broader economic indicators that could influence its trajectory in the coming months.
