The cryptocurrency market, while technically still in a bull cycle, is experiencing signs of weakening momentum according to a recent report by CryptoQuant. Bitcoin (BTC) and various altcoins are struggling, with BTC hovering around crucial levels and recently dipping below the $65,800 on-chain realized price mark. Despite these fluctuations, analysts maintain that the market remains in a bullish phase.
Key concerns include weak demand from Bitcoin whales and diminished liquidity in stablecoins. Whale demand growth is currently at a modest 4.8% monthly rate, a significant drop from the 6%-10% growth seen earlier in the year. This lower demand from large BTC holders signals a reduced appetite for accumulation, which is a bearish indicator for market sentiment.
Additionally, the overall liquidity in stablecoins, which are often used as a barometer for potential capital inflow into the market, has slowed dramatically. Tether’s (USDT) 60-day market capitalization growth has decelerated from $12.6 billion to $3.7 billion, indicating reduced liquidity which is essential for price surges.
U.S. investor demand for BTC and Ethereum (ETH) is also at its weakest, with BTC and ETH premiums on Coinbase remaining below zero. This lack of demand is further evidenced by the consistent outflows from Bitcoin exchange-traded funds (ETFs), which have seen daily outflows exceeding $100 million recently.
The CryptoQuant Bull-Bear Market Cycle indicator, which remains in a downward trend, suggests the market is in a bull cycle but lacking significant upward momentum. For a renewed bullish trend, a crossover above the 30-day moving average is necessary.
In conclusion, while the crypto market is still within a bull cycle, the absence of strong demand from whales and low stablecoin liquidity are worrying signs that could impact future price movements. Market participants should watch these indicators closely as they navigate this uncertain terrain.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
