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The recent surge in the price of the leading cryptocurrency, Bitcoin ($BTC), pushing it above $73,000, has fueled bullish sentiment.
However, according to CryptoQuant, while Bitcoin’s rise looks encouraging, it appears to be a short-term relief rally rather than the beginning of a new bull cycle.
Julio Moreno, head of research at CryptoQuant, said that according to on-chain data, Bitcoin’s recent recovery was merely a relief rally.
At this point, Moreno predicts that $BTC’s rise above $73,000 is not the beginning of a new bull cycle, but rather a short-term bounce triggered by decreasing selling pressure.
Moreno stated that Bitcoin is still in a bear market, adding:
“Despite the recent price increase, Bitcoin is still in a bear market. Fundamental and technical indicators still point to a bear market environment.”
Therefore, the current rise should be interpreted as a relief rally within the ongoing bear market.
Moreno attributed the recent recovery to improved spot demand, increased interest from US investors, and reduced selling pressure from both short-term and long-term investors.
Moreno highlighted that CryptoQuant’s Bitcoin Bull Score Index is currently 10 out of 100, indicating that technical indicators have not yet recovered in favor of a bull market.
The analyst added that if Bitcoin’s upward trend continues, the next major resistance zone will likely be between $79,000 and $90,000.
The $79,000 level historically acts as resistance in bear markets, representing the lower end of the on-chain price for investors.
$90,000 represents the lowest level of overall realized price for investors, limiting a rally seen earlier this year. Moreno also noted that this range acted as a strong resistance level during the January rally.
*This is not investment advice.
cryptobriefing.com
coindesk.com