Dusk Signal of Bull Market? Analysts Warn Bitcoin May Face Correction, Rate Cut Expectations Can't Prevent Profit Taking
According to CryptoQuant analyst Axel Adler Jr's view today, the current market may be entering the late stage of a bull market, with a significant characteristic being a decrease in investors' risk appetite.
He cited the technical indicator charts of BTC's NUPL and MVRV, indicating that the 30-day SMA average of this indicator was above 1.9 in March and December 2024, but is now forming a lower peak, suggesting that holders are beginning to actively sell tokens, bringing downward pressure to the market.
However, despite investors continuously taking profits, the additional profit they gain relative to their cost basis (i.e., marginal premium) is becoming increasingly smaller with each price increase.
Based on this observation, and combined with the expected two rate cuts by the Federal Reserve this year, Adler Jr predicts that Bitcoin may experience two more rises in this cycle, but subsequent selling pressure will exceed demand, and the market will enter a correction phase.
At the same time, Matrixport analyst Markus Thielen also expressed similar market concerns. He noted that Bitcoin recently fell below the key technical support level of $112,000, leading to a shift in market sentiment. Although there are still many bullish voices in the market, previous cautious judgments have gradually been proven correct.
Analysis suggests that this round of decline not only continues the seasonal weakness of August but is also affected by macro uncertainty triggered by downward adjustments in labor market data. Thielen also mentioned that a similar situation occurred at the same time last year when the Federal Reserve unexpectedly cut rates by 50 basis points due to market pressure.
Meanwhile, the market has priced in two rate cuts, the first of which may be implemented in September. However, before improvements in the macro economy and market fundamentals, risk assets, including Bitcoin, may still maintain weak performance.
In summary, whether it is the divergence of technical indicators, the shift in market sentiment, or the constraints of the macro environment, the market points to a possible risk window period. Although rate cut expectations bring a hint of warmth to the market, profit taking and selling pressure from investors may trigger market adjustments. Investors should act cautiously and manage risks well.
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