Summary
Bitcoin has surged to $58,000, driven by positive sentiment in global markets, yet crypto analyst Julio Moreno warns of bearish indicators suggesting price corrections. Key metrics show that Bitcoin is in a bear phase, complicating the very recent price rally.

Bitcoin (BTC), the leading cryptocurrency in terms of market capitalization, experienced a price surge, reaching highs of $58,487 during early Thursday trading. Despite this increase, Julio Moreno, the Head of Research at CryptoQuant, has cautioned investors to remain vigilant amid signs of a potentially bearish market. Moreno pointed out that Bitcoin’s price trajectory still reflects bearish tendencies, indicating a disconnection from traditional safe-haven assets like gold as investors adopt a more risk-averse strategy. CryptoQuant’s analysis revealed that the Bull-Bear Market Cycle Indicator has remained in a bearish state since August 27, when Bitcoin traded around $62,000. The absence of a significant rally is anticipated as long as this indicator continues in the bear phase. Furthermore, the MVRV ratio has recently dipped below its 365-day moving average, a trend that historically signals the potential for further price corrections. Such patterns were observed in May 2021, when Bitcoin suffered a 36% decline over a span of two months, and in November 2021, which marked the onset of the previous bear market. Moreover, concerning indicators are emerging from the behavior of long-term holders of Bitcoin (LTH), who have been liquidating their holdings at diminishing profit margins. The LTH SOPR (Spent Output Profit Ratio) ribbons have shown a downward trend since late July, suggesting a lack of renewed demand for Bitcoin. In this volatile context, Bitcoin did manage to briefly exceed $58,000, buoyed by positive performance in U.S. equities and gains from the Asian stock markets. The rise in U.S. inflation data from August has prompted speculation regarding potential rate cuts by the Federal Reserve, as core inflation figures unexpectedly rose beyond 0.3%. At the time this report was compiled, Bitcoin noted a 2.18% increase over the last 24 hours, marking its price at $58,025. Nevertheless, spot Bitcoin exchange-traded funds (ETFs) in the United States experienced a reversal, reporting outflows of $43 million on Wednesday after a brief period of inflows.

The cryptocurrency market is known for its volatility, with significant price fluctuations being common, especially for leading assets such as Bitcoin. Recent trends have indicated conflicting signals within the market. On one hand, Bitcoin’s recent price increase is attributed to favorable economic indicators and market sentiment improvements in traditional equities. On the other hand, analyses from prominent industry experts are signaling caution, highlighting technical indicators that suggest a bearish sentiment may prevail. Understanding these dynamics is crucial for investors navigating this ever-changing landscape.

In summary, although Bitcoin has recently reached a notable price of $58,000, experts advise caution due to prevailing bearish indicators. The disconnect from gold and the behavior of long-term holders further underline the complexity of the current market situation. Investors are encouraged to conduct thorough research and consider professional financial advice before making investment decisions, especially in light of the recent outflows seen in Bitcoin ETFs.

Original Source: u.today

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