Bitcoin Bull-Bear Market Cycle Indicator Analysis
You’re exploring the latest trend in the Bitcoin Bull-Bear Market Cycle Indicator, a metric developed by analytics firm CryptoQuant. This indicator is based on the P&L Index, a valuation indicator for Bitcoin that determines whether the coin is undervalued or overvalued by combining data from three popular profit and loss indicators: MVRV Ratio, NUPL, and SOPR.
Historically, the P&L Index’s interaction with its 365-day moving average (MA) has been significant. A cross above the MA line indicates a shift to a bull phase, while a drop below signals a bearish trend. The Bitcoin Bull-Bear Market Cycle Indicator measures the distance between the P&L Index and the MA to determine market sentiment.
Bitcoin Bull-Bear Market Cycle Indicator Trends
- The Bitcoin Bull-Bear Market Cycle Indicator peaked during a rally, leading to a new all-time high for Bitcoin.
- A higher value of the indicator suggests an overpriced asset, reaching levels associated with an “overheated bull” during the ATH break.
- The indicator’s value has declined since the ATH, implying a cooling-off period for Bitcoin’s bullish momentum.
- The market is currently in the least bullish state since September 2023, indicating a shift in sentiment.
Bitcoin Market Outlook
- Bitcoin is currently trading at around $61,600, experiencing a more than 5% decrease over the past week.
- The indicator’s cooling-off may not be negative for the asset, as similar consolidations in the past have led to fresh bullish momentum.
- There is uncertainty about whether the indicator has completed its drawdown or will transition into negative territory, signaling a bearish trend.
Hot Take: Head of Research Analyzes On-Chain Data
Based on on-chain data, the Head of Research at the analytics firm CryptoQuant has explained how Bitcoin has been looking less bullish recently.
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