The crypto market turned green in the first week of May, but skepticism remains strong. Some believe that current signals point to signs of a larger future bullish cycle, especially as Bitcoin overcomes key psychological thresholds.
However, others warn that temporary factors may distort the indicators. This article uses on-chain data and historical patterns to explore both sides of the argument.
Is the Crypto Market Expecting a Bull Market?
The bull and bear market cycle indicator from CryptoQuant, designed to identify bullish and bearish phases in the crypto market, recently showed positive signs.
Since February 24, 2024, the indicator has consistently signaled a bear market. However, in recent days, it has begun to show signs of a potential reversal. Nonetheless, the signal remains weak and unclear. In mid-2024, this same indicator caused misleading forecasts. The market has been moving sideways for an extended period without forming a clear trend.
Analyst Burakkesmeci added observations using 30-day and 365-day moving averages (30DMA and 365DMA) to refine bullish potential.
«More importantly, the 30DMA — the short-term moving average — has started to rise. If this indicator crosses the 365DMA, history shows that we may see parabolic rallies in Bitcoin again,» predicted Burakkesmeci.
However, analyst Darkfost suggested a more cautious perspective by reviewing the growth rate indicator. This indicator assesses the state of the Bitcoin market — bull or bear — by comparing market capitalization and realized capitalization of Bitcoin.
He noted that the indicator is returning to bullish territory, coinciding with Bitcoin ($BTC) reaching the important milestone of $100,000 again. Instead of predicting the end of the bear market and the beginning of a bullish rally, Darkfost warned that this could be a false recovery caused by special circumstances.
These special circumstances include Donald Trump's signing of a trade agreement with the United Kingdom, which helped alleviate concerns about tariff shocks. Meanwhile, the U.S. Federal Reserve has maintained a cautious stance and left interest rates unchanged.
«It is possible that traditional market dynamics will continue to be disrupted for some time, making the current environment particularly difficult to understand,» said Darkfost.
Another important indicator is the cryptocurrency fear and greed index. It has risen to 73, entering the 'Greed' zone — the highest level in two months. This indicates that investor sentiment is shifting from caution to excitement. However, high levels of 'Greed' or even 'Extreme Greed' often serve as warning signals. Historically, these levels have preceded significant price corrections.#BinanceSquare #Write2Earn #Binance #crypto #TradeStories $ETH
