The cryptocurrency market started May on a positive note, but skepticism is still strong. Expert opinions are divided.
Some experts believe that the current signals may herald the start of a new bullish cycle, especially when Bitcoin
overcomes important psychological marks. However, there are those who warn that temporal factors may distort the indicators. Let's consider the arguments from both sides.
Is the market preparing for a bull rally?
The market cycle indicator from CryptoQuant, designed to identify bullish and bearish phases in the crypto market, recently showed positive signals. Since February 24, 2024, the indicator has consistently indicated a bear market. However, in recent days it has begun to show signs of a potential reversal.
However, this signal remains weak and unclear. Additionally, in mid-2024, the indicator had already given erroneous forecasts. The market remained in sideways movement for a long time, not forming a clear trend.
Analyst Burakkesmeci used 30-day and 365-day moving averages (30DMA and 365DMA) to better assess bullish potential.
"It is important that the 30DMA — the short-term moving average — has started to rise. If this indicator crosses above the 365DMA, history suggests that we may see parabolic Bitcoin rallies again," predicted Burakkesmeci.
The recovery may be false
However, analyst Darkfost offered a more cautious view. He refers to the Growth Rate Indicator. This tool assesses the state of the Bitcoin market — bullish or bearish — by comparing the market and realized capitalization of BTC. Darkfost noted that the indicator is returning to the bullish zone. This coincides with Bitcoin's recovery above the important mark of $100,000.
However, Darkfost is not rushing to predict the end of the bear market and the beginning of a bull rally. He warned that the recovery may be false, as it is driven by specific conditions. These include Donald Trump's signing of a trade agreement with the UK. This helped alleviate concerns about tariff shocks. Meanwhile, the Federal Reserve has maintained a cautious stance and left interest rates unchanged.
"Traditional market dynamics may remain disrupted for some time. This makes the current situation particularly difficult to understand," Darkfost noted.
Meanwhile, another important indicator is the cryptocurrency fear and greed index. It reached 73, entering the 'Greed' zone, which is the highest value in the last two months. This indicates that investor sentiment is shifting from caution to enthusiasm.
However, high levels of 'Greed' or even 'Extreme Greed' often serve as warning signals. Historically, such levels have preceded significant price corrections.
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