Bitcoin has continued its bearish momentum as its price has now slipped below $56,000. Here’s what could be behind this trajectory, according to CryptoQuant’s Head of Research.
Bitcoin On-Chain Metrics Are All Giving Bearish Signals Right Now
In a new thread on X, CryptoQuant Head of Research Julio Moreno has discussed why the original cryptocurrency has been struggling recently. “Bitcoin price is down simply because there is no demand growth,” notes the analyst.
To showcase how demand for the asset has been looking like, Moreno has shared the chart for the “Apparent Demand” indicator, which leverages on-chain data to estimate the 30-day demand for BTC among investors.
Looks like the value of the metric has been low in recent days | Source: @jjcmoreno on X
According to the above graph, demand for Bitcoin had been high earlier in the year, according to this indicator. Still, after peaking in April, the indicator sharply declined towards zero.
Since then, the Apparent Demand has continued to consolidate around this neutral level, which may be why the cryptocurrency’s price has been locked in an overall bearish trajectory.
The second indicator that the CryptoQuant head has cited is the Bitcoin Bull-Bear Market Cycle Indicator. This metric combines a few BTC indicators related to profit and loss to produce one value that sums up the entire market.
The value of the metric has been negative in recent days | Source: @jjcmoreno on X
From the graph, it’s visible that the the asset had been inside the historical “Overheated Bull” region from the perspective of CryptoQuant’s Bull-Bear Market Cycle Indicator back when its price had set the all-time high (ATH).
After the coin had cooled off from this top, the indicator flashed a normal “Bull” signal, just like it had done in January and February. These bull market conditions were maintained until the crash early last month.
During this plunge, BTC dropped below $50,000, and the Bull-Bear Market Cycle Indicator flagged the market as “Bear.” Since then, the indicator has continued to consolidate around the transition boundary, jumping back and forth between Bull and Bear signals.
In the past week or so, though, the metric has consistently maintained inside the Bear region, which may be why Bitcoin has registered a drawdown of 6% in this window.
Moreno has also pointed out a price level to watch, as BTC is quite close to retesting it. The level in question is the lower band of the average cost basis of the BTC traders.
The Realized Price of the BTC Traders | Source: @jjcmoreno on X
At present, this level is situated around $55,500. It remains to be seen how a retest of this level goes if the cryptocurrency continues its decline.
BTC Price
Bitcoin is currently trading around $55,900, which means the coin is pretty close to retesting the trader above the cost basis level.
The price of the coin has been struggling for a while now | Source: BTCUSD on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
Keshav Verma
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
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