As a researcher with extensive experience in analyzing cryptocurrency markets and on-chain data, I have closely followed the recent developments in Bitcoin’s price action and market sentiment. The latest insights shared by CryptoQuant Head of Research Julio Moreno regarding the Bitcoin Bull-Bear Market Cycle Indicator piqued my interest.
According to the latest on-chain analysis from the Head of Research at CryptoQuant, Bitcoin‘s recent behavior suggests a less bullish outlook.
Bitcoin Bull-Bear Market Cycle Indicator Has Seen A Decline Recently
In his latest blog entry on platform X, CryptoQuant’s Head of Research Julio Moreno discussed the recent developments in the Bitcoin Bull-Bear Market Cycle Indicator, which utilizes the P&L Index – a metric created by the analytics company.
The P&L Index serves as a Bitcoin evaluation tool, signaling whether the cryptocurrency’s price is potentially underpriced or overpriced. It calculates this value by merging the statistics of three widely-used profitability indicators: MVRV Ratio, NUPL, and SOPR.
Historically, the relationship between the P&L Index and its 365-day moving average (MA) has held importance in the cryptocurrency market. When the P&L Index surpasses its MA, it has often indicated a shift into a bullish phase. Conversely, a fall below the MA has frequently signaled a move into a bearish trend.
The Bitcoin Bull-Bear Market Cycle Indicator works by calculating the difference between the P&L Index and a significant moving average.
When the value of this indicator is more than zero, it indicates that Bitcoin is experiencing a bull market based on the P&L Indicator being above its moving average of 365 days. Conversely, when the value is less than zero, it suggests an ongoing bear market.
Below is the chart for this CryptoQuant indicator over the past year:
The Bitcoin Bull-Bear Market Cycle Indicator reached new heights in the recent rally, contributing to a new record peak (all-time high) for the cryptocurrency.
As a researcher studying market trends, I have observed that a higher value of a given metric tends to indicate overvalued assets. During past all-time highs (ATH), this metric reached levels associated with an “overheated bull” market. It’s possible that the cryptocurrency hit its peak at that time due to these market conditions.
As an analyst, I’ve observed that the Bitcoin market has cooled down a bit after its consolidation. The indicator’s value is no longer as heated up as before, yet it remains above the zero line, indicating that we are still in a bull market. However, the current market situation is the least bullish it has been since September 2023.
In September 2023, the asset’s price action saw it hovering near its lows, with a period of sideways movement. This pause in downtrend marked the build-up of energy for a new bullish trend. Consequently, a temporary retreat or “cooling off” of the indicator readings might not be detrimental to the asset’s price recovery.
As a researcher, I cannot yet determine with certainty if the indicator has completed its decline or if it will dip further into negative territory. Should this occur, we would be looking at a shift in market sentiment towards bearishness.
BTC Price
At the time of writing, Bitcoin is trading at around $61,600, down more than 5% over the past week.
Read More
- SOL PREDICTION. SOL cryptocurrency
- USD ZAR PREDICTION
- AVAX PREDICTION. AVAX cryptocurrency
- MNT PREDICTION. MNT cryptocurrency
- USD MYR PREDICTION
- Top gainers and losers
- RARE PREDICTION. RARE cryptocurrency
- ARKM PREDICTION. ARKM cryptocurrency
- TAO PREDICTION. TAO cryptocurrency
- Call of Duty: MW3 and Warzone Season 5 Reloaded Update Patch Notes Revealed
2024-06-25 03:11