CryptoQuant: Crypto market still in bull cycle
Currently, the cryptocurrency landscape is awash with a downturn, with both bitcoin (BTC) and various altcoins experiencing a notable slump. The market shows no indications of an uptrend, with BTC trading around critical thresholds.
Nonetheless, analysts from CryptoQuant maintain a bullish outlook for the market, as highlighted in a recent analysis.
The cryptocurrency sector's lack of momentum towards growth is underscored by a stagnation in demand from bitcoin's significant investors and a decline in stablecoin liquidity. The buying interest of prominent BTC stakeholders is tepid, with a monthly growth rate of only 4.8%. Though this figure has slightly improved from the 2.4% seen towards the end of May, it pales in comparison to the 6%-10% growth rates witnessed in the first quarter of the year, a period when BTC soared to its peak levels.
Moreover, the enthusiasm among traders to acquire BTC appears to be waning, as evidenced by blockchain data, signaling a halt in purchases. This group of market participants has been reducing their bitcoin stakes since the asset's valuation peaked at $70,000 around the end of May.
The market's capacity for price surges is also hindered by dwindling stablecoin liquidity, which has reached its lowest growth rate since November 2023. The 60-day market capitalization growth for Tether (USDT), for example, has decelerated from $12.6 billion in late April to just $3.7 billion now. A resurgence in stablecoin liquidity is crucial for an uptick in cryptocurrency values.
Additionally, the interest from investors in the United States towards bitcoin and ether (ETH) remains subdued. This is evident from the negative values of the BTC and Ethereum Coinbase Premiums since May 20, which highlight a lack of demand growth from U.S. investors—a key factor for price escalations for both BTC and ETH.
This decreased demand is further mirrored in the continuous outflows from spot Bitcoin exchange-traded funds, which have been experiencing net withdrawals since June 13. Over the last week, these funds have seen an average loss exceeding $100 million each trading day.
Indeed, according to CryptoQuant’s Bull-Bear Market Cycle indicator, the market is still in a bullish phase, albeit lacking upward drive. The index has dropped to its lowest since October 2023 and sits below its 30-day moving average. For an upswing in bullish momentum, the index needs to cross above this average.
In the interim, the likelihood of BTC falling to $60,000 has increased, given its descent below the on-chain realized price level identified by traders.
