The price of Bitcoin may be going down, but there is a catch: CryptoQuant

Since last weekend, the price of bitcoin (BTC) has increased significantly, which indicates that the crypto asset may go down. While hovering around $64,000 at the time of writing, Bitcoin has bounced back to $67,000. This comes after shareholders realized their biggest losses in 2024.

CryptoQuant analysts said on-chain metrics suggest positive momentum in the near term. However, stable coin liquidity and demand for Bitcoin may not be sustainable as it has seen little to no growth.

Bitcoin may be down.

CryptoQuant BTC holders realized a loss of $2.5 billion in two days last week, just before the cryptocurrency went up again. This can refer to seller's capital, which is often associated with price caps.

Another sign that Bitcoin may be headed lower is the easing of selling pressure from major entities, including the German government, and the shutdown of crypto exchange Mt. Gox is a recovery property. The former ended up selling BTC, and the latter moved its holdings to the exchange to start the distribution process to creditors.

Additionally, unrealized profit margins for Bitcoin traders have reached extremely low levels, the most negative since shortly after the collapse of crypto exchange FTX, which went bankrupt in November 2022. % This is usually a sign of inflation.

“From a valuation point of view, Bitcoin's price also seems to have bottomed out, and indicators point to a positive recovery. CryptoQuant's P&L index has broken its 365-day moving average (red circles), indicating that price has bottomed in the area and may continue to rise,” the analysts wrote.

Kach

Although CryptoQuant's Bull-Bear Market Cycle Indicator shows that the market is still in a bull phase, Bitcoin demand has not started to rebound to pave the way for a new price rally towards fresh highs. A positive and rapid demand growth is required for a significant increase. However, demand for Bitcoin is still below zero.

Likewise, stable coin liquidity, particularly from Tether USDT, is yet to accelerate. The stablecoin's monthly growth is still close to 0%; Rapid growth is needed for continued price increases.

CryptoQuant's analysis correlates with Bitfinex, which believes that BTC may witness more bloodshed in the near future due to certain factors.