Bull or bear phase? CryptoQuant says Bitcoin is at a critical point.

Bitcoin (BTC) is currently at a critical point that could determine whether the price will go lower or lower, as seen in the summer of 2021 correction.

Some indicators suggest that the major crypto asset has reached its final correction, while others indicate that there may be more bloodshed and pain for market participants.

Bitcoin at Pivotal Point

According to CryptoQuant's latest weekly crypto report, it may take some time for Bitcoin's price to rally or lower as the stable coin's liquidity growth is yet to consolidate. Historically, when more liquidity enters the crypto market through the creation of Tether (USDT), price increases. However, this situation has yet to be met as the USDT market price growth is still slowing down.

On the other hand, the market value of USD Coin (USDC) has been growing by 5.6% every month. Regardless, Tether's slow growth suggests BTC may not be rallying anytime soon.

CryptoQuant analysts also noted that the platform's profit and loss indicator signal is hovering over the 365-day moving average. A drop below this level is often associated with major corrections or the onset of a bear market.

Additionally, CryptoQuant's Bull-Bear Market Cycle Indicator may turn into a bear market if the price drops further. It is at its lowest bullish level since early 2023, and a reversal to bearish levels could trigger further declines in the near term.

Investors are realizing losses.

Conversely, large bitcoin investors are now realizing losses. With BTC plunging to a four-month low of $53,000 a week ago, new big investors have lost nearly $1 billion. Investors who sell their holdings at a loss often undervalue them.

Margins for Bitcoin traders are negative, and this set of investors will only realize their losses if they continue to liquidate their assets. Traders' unsecured margins are currently at 17%, the most negative since the collapse of crypto exchange FTX in November 2022.

Additionally, Bitcoin whales and large investors are increasing their holdings by 6.3% per month, the fastest pace since April 12. This is a sign that demand for bitcoin is growing, which often has a positive effect on prices.

While miners are still mining, it remains to be seen which direction BTC will go.