Bitcoin falls below $60 000
Throughout the past seven days, Bitcoin has staged a comeback, momentarily reaching the $60k mark.
After descending to weekly lows, attempting to climb, Bitcoin faltered, dipping under the $60k threshold once more. Despite this, the ongoing market dynamics are sparking discussions among analysts.
Crypto expert Ali Martinez has pointed out that a shift in Bitcoin's trend has yet to solidify, basing his observation on the currency's transaction volume.
Martinez's assessment highlights a decrease in trading volume, indicating the absence of a trend shift.
His analysis outlines that, typically, BTC transaction volume amplifies during an uptrend and diminishes in a downturn. Hence, the observed reduction in trading volume signals that the market is experiencing a downturn.
Generally, an uptrend in price is accompanied by heightened transaction volume as more traders engage in buying and selling, elevating market activity.
An uptick in volume often validates an uptrend's vigor, reflecting the heightened engagement of investors in the market.
Conversely, a downturn in the market is characterized by diminished volume, pointing to a decrease in market participants. This condition underlines the persistence of bearish market sentiment.
Martinez observes a significant 58.66% drop in Bitcoin trading volume over the last day. Thus, according to his analysis, BTC remains engulfed in a bear market phase.
Martinez's observations further reveal that despite Bitcoin's attempts to rise, bearish forces maintain a stronghold over the market. As a result, Bitcoin could be poised for a downward trajectory.
Over the recent week, there has been a decline in Bitcoin's fund flow ratio, hinting at diminished buying compared to selling, indicating a lackluster influx of investor capital into the market.
This bearish sentiment manifests as investors exit their positions, exerting downward pressure on prices.
Moreover, Bitcoin's net realized profit/loss (NRPL) has seen a downturn in the past two days following a spike, indicating a phase where investors are selling at a loss.
This trend points to a lowered demand for BTC as fewer buyers are inclined to buy at elevated prices, or trading activity is on the decline.
Additionally, Bitcoin's price DAA (Daily Active Addresses) divergence has persisted over the last week. A negative DAA divergence occurs when Bitcoin prices ascend while daily active addresses wane.
This scenario suggests that although prices are climbing, the underlying network utilization isn't keeping pace. This is indicative of a bearish stance, as the price increase seems to be propelled by speculative trading rather than genuine usage.
In essence, as Martinez underscores, Bitcoin remains engulfed in a bearish trend. Consequently, should this unfavorable market sentiment persist, BTC is at risk of descending to $57342.
