Bitcoin relief rally faces headwinds as bear market persists: analysts
Why it matters: Investors should remain cautious as Bitcoin's bear market persists despite brief rallies, with macro uncertainties looming.
- CryptoQuant's Bull Score Index remains at a deeply bearish 10 out of 100, indicating that fundamental and technical indicators still point to a bear market, not a new bull phase.
- Nick Ruck of LVRG Research attributes the brief rally to "renewed risk appetite and ETF inflows" but cautions that "persistent macro uncertainties" and "fading momentum" quickly led to a pullback.
- Coinbase Premium turned positive, signaling renewed U.S. buying interest and driving the recent rally, with spot demand from U.S.-based investors switching from contraction to growth.
- Selling pressure from traders and long-term holders has eased as unrealized losses reached levels not seen since July 2022, potentially offering some support.
- Analysts at SwissBlock observe a "critical shift" in momentum, suggesting the market is "exiting peak negative momentum," which often precedes a regime change, offering a glimmer of hope.
- CoinDesk highlights that the rally faded ahead of U.S. jobs data, indicating short-termism, and notes that the bond market isn't convinced by the stabilization in Bitcoin and stocks.
Bitcoin's recent rally above $74,000 proved to be a fleeting "relief rally," with analysts from CryptoQuant and LVRG Research largely agreeing that the cryptocurrency remains entrenched in a bear market despite brief renewed U.S. buying interest and easing selling pressure. While some indicators suggest a potential shift in momentum, the advance quickly faced headwinds, pushing Bitcoin back below $71,000 amid persistent macro uncertainties and short-term trading pressures.
