Bitcoin is showing signs of life but a prominent market cycle indicator is at the most bearish level “so far this cycle”, CryptoQuant says.
Bitcoin has clocked a 7% gain over the past 24 hours despite all of its valuation metrics leaning bearish and US demand recently waning off.
“All Bitcoin valuation metrics indicate that we are in bearish territory,” on-chain analytics platform CryptoQuant said in a March 11 markets report viewed by Cointelegraph.
Demand has fallen at the “fastest pace” since July
CryptoQuant said its Bitcoin Bull-Bear Market Cycle Indicator is at its “most bearish level’ of this cycle, and Bitcoin’s MVRV Ratio Z-score — a key metric to assess whether Bitcoin
BTC $81,884 is overvalued or undervalued — has crossed the 365-day moving average, “indicating that the upward price trend has lost momentum.”
At the time of publication, Bitcoin is trading at $82,910, up from a 24-hour low of $79,356, according to CoinMarketCap data.
Bitcoin has spiked 7.5% over the past 24 hours as the US market steaded on March 11 after plunging a day earlier after US President Donald Trump refused to rule out that a recession was on the cards.
Most of Bitcoin’s gains followed Senator Cynthia Lummis’ reintroduction of the BITCOIN Act, which proposes that the US government buy 1 million BTC over five years.
However, some traders are not convinced that the downtrend is over.
Crypto analyst Bitcoin Rachy said in a March 11 X post, “Fake pump, right?” Similarly, crypto trader BitcoinHyper said in an X post, “Every pump feels like the beginning. This is how the market takes your money.”
Meanwhile, CryptoQuant said that Bitcoin’s demand fell by 103,000 BTC last week compared to the previous week, “marking its fastest pace of contraction since July 2024.”
Bitcoin demand in “contradiction territory”
CryptoQuant said the reason for the decline in Bitcoin’s demand in the US recently was due to uncertainty around US inflation rates and US President Donald Trump’s imposed tariffs on Feb. 1. On March 7, Federal Reserve chair Jerome Powell reiterated that he was in no hurry to adjust interest rates.
“Bitcoin demand remains in contraction territory, whales have slowed down their Bitcoin accumulation, and spot ETFs in the US have turned into net sellers of Bitcoin,” the firm said.
Bitcoin is still down 14% over the past month, and CryptoQuant says the drawdown is not “unusual in terms of magnitude, as similar corrections have occurred in past bull markets.”
However, it warned if Bitcoin that breaks its current support at the $75,000 to $78,000 price level, its next target could be as low as $63,000, a level not seen since Oct. 14.
Swan Bitcoin CEO Cory Klippsten recently told Cointelegraph his forecast is that “there’s more than 50% chance we will see all-time highs before the end of June this year.” Bitcoin’s current all-time high of $109,000 was reached on Jan. 20.
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