Bitcoin had a brief relief rally above $74,000 on Thursday, but that has already been wiped out as analysts predict the bullish market will continue to slow.
“Bitcoin remains in bear market despite recent rally,” analyst firm CryptoQuant said Thursday.
The platform’s Bull Score Index, a composite indicator that measures the overall health of Bitcoin (BTC) using a combination of fundamental and technical metrics, remains at 10 out of 100, “in bearish territory.”
“Even after the recent price rally, the fundamentals and technical indicators are still indicative of the market environment,” he said.
“The current move is likely just a rallying rally, not the start of a new bull phase.”
Bitcoin hit a one-month high of $74,000 on Coinbase on Thursday and hit its 50-day exponential moving average, according to TradingView. However, it has already lost more than $3,000, falling below $71,000 during Friday morning trading.
Bitcoin is still vulnerable to renewed low pressure
Nick Ruck, director of LVRG Research, told Cointelegraph that the recent rally in the crypto market was fueled by “resurgent risk appetite and ETF inflows,” but warned that the advance “will soon face headwinds, with prices heading back to $71,000 amid continued macro uncertainty and headwinds.”
While the brief push in favorable liquidity conditions provided a welcome rally, “current bear market dynamics reinforce caution as softer macro signals, such as the expected decline in non-farm payrolls in February, keep cryptocurrencies vulnerable to renewed downward pressure,” he said.
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CryptoQuant said Coinbase’s positive premium indicates increased US buying sentiment, which is driving the recent rally.
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They said that demand for bitcoin from American investors also went from declining to increasing, as Coinbase Bitcoin Premium said “moved from very negative territory in early February to the most positive since October.”
Selling pressure from traders and long-term holders also eased after unrealized losses fell to levels not seen since July 2022.
Meanwhile, SwissBlock analysts observed on Friday that “the momentum has a critical shift,” adding that “we are coming out of a negative boom, the type of transition that often precedes regime change.”
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