Markets
The crypto market is still in a bull cycle but there are worrying signs: CryptoQuant
The crypto market is in the red amid a major bloodbath due to Bitcoin (BTC) and altcoins. There is currently no bullish momentum and BTC is oscillating around key levels, falling below the realized trader channel price of $65,800.
Regardless, CryptoQuant analysts insist in a recent report that the market is in a bull season.
Lack of bullish momentum
The lack of bullish momentum in the crypto market is evident in the weak growth in demand for bitcoin whales and the low stable liquidity of the coins. Demand from large BTC holders has no strength and is growing at a monthly rate of 4.8%. Although the current rate is slightly higher than the 2.4% seen in late May, it is still far from the 6-10% recorded in the first quarter of this year, when BTC reached its all-time high.
Additionally, trader demand for BTC has yet to pick up, as shown by on-chain data, suggesting that they are not purchasing the asset at the moment. This cohort of investors was decrease their holdings since the price of bitcoin hit $70,000 in late May.
Stable liquidity of the coin, correlated to price rallies, continued to decline, recording the slowest pace since November 2023. Tether’s (USDT) 60-day market cap growth slowed from $12.6 billion at the end of April to $3.7 billion Currently. The crypto market needs higher stable liquidity for prices to rise.
BTC could reach $60,000
Additionally, demand for Bitcoin and Ether (ETH) from US investors is still at an all-time low, as evidenced by the fact that BTC and Ethereum Coinbase premiums remain below zero since May 20. Growing demand from US investors is a significant driver for BTC and ETH. prices.
Weak demand from US investors is also visible in Bitcoin spot exchange-traded funds, which have been on a streak of outflows since June 13. lost more than $100 million each trading day over the past week.
“Indeed, CryptoQuant’s Bull-Bear Market Cycle Indicator is still trending downward, signaling that we remain in a bull market but without much bullish momentum. The index is at its lowest level since October 2023 and below its 30-day moving average. A crossover with the 30-day moving average is necessary for the index to signal upward bullish momentum,” CryptoQuant said.
Meanwhile, BTC could decline even more so at $60,000 as it fell below the price realized on-chain by traders.