CryptoQuant: Bitcoin At A Crucial Juncture – Bull Or Bear Ahead?
Bitcoin (BTC) is at a critical juncture that could determine whether its price has bottomed out or will decline further, similar to the correction seen in the summer of 2021.
Some metrics indicate that the leading cryptocurrency may have reached the bottom of its latest correction, while others suggest more pain could be in store for market participants.
Bitcoin at a Pivotal Point
CryptoQuant’s recent weekly report highlights that Bitcoin’s price may take longer to rally or bottom out due to slow growth in stablecoin liquidity.
Historically, prices have rallied when more liquidity enters the market through Tether (USDT) minting. However, this condition has not yet been met, as USDT’s market cap growth remains sluggish.
In contrast, the market cap of USD Coin (USDC) has been increasing by 5.6% monthly.
Despite this, Tether’s slow growth indicates that BTC might not rally soon.
CryptoQuant analysts also pointed out that their Profit and Loss Index signal is hovering around its 365-day moving average.
A drop below this level is often associated with major corrections or the onset of a bear market.
Additionally, CryptoQuant’s Bull-Bear Market Cycle Indicator may switch to a bear market if prices fall further.
It is currently at its lowest bullish level since early 2023, and a shift to the bear phase could trigger more declines in the near term.
Investors Realizing Losses
Large Bitcoin investors are now realizing losses Since BTC dropped to a four-month low of $53,000 about a week ago, new large investors have realized nearly $1 billion in losses.
Selling at a loss usually indicates a price bottom.
Bitcoin traders’ margins are also negative, and these investors will continue to incur losses if they keep offloading their holdings.
Traders' unrealized margins are currently at 17%, the most negative since the collapse of the bankrupt crypto exchange FTX in November 2022.
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