Cautious market signals suggest that Bitcoin (Bitcoin-BTC) is entering a re-evaluation phase, and changes in both investor behavior and demand for Bitcoin may be the start of the road toward long-term structural changes.
While Bitcoin (Bitcoin-BTC) value indicators reflect a bleak picture, one analyst from CryptoQuant suggests that the market may witness swings between Bitcoin's true value and the onset of a bear market, as this analysis - published on March 11 - revealed that all leading indicators point to a cautious control over the market, with the Bitcoin bull/bear market index currently positioned at its lowest levels for this cycle, a level that is usually followed by a sharp correction or downward trend according to what has occurred in previous market cycles.
In parallel, the MVRV Ratio Z-score has fallen below its 365-day moving average, which is an indicator that reflects the ratio between market capitalization and realized value, and the standard deviation of all historical market cap data, determining whether Bitcoin is overvalued or not, suggesting the fading of Bitcoin's previous upward momentum. This shift in overall sentiment is crystallized through the noticeable decline in demand for it, which decreased by 103,000 BTC in one week, marking the fastest pace of decline since July 2024.
The slowdown in whale purchases of Bitcoin signals a decline in demand.
This sharp decline indicates a prevalence of hesitation among buyers and a lack of confidence in the market, as the pace of purchases by large whales (major investors) of Bitcoin has slowed down, and they are usually the ones who move the market through large purchases.
Moreover, outflows from Bitcoin Spot ETFs in the United States have exceeded inflows this year, increasing downward pressure on prices.
While the current BTC price drop of 22% seems consistent with corrections experienced during previous bull market cycles, value indicators raise concerns and indicate that it is an unusual drop, rather it is a deeper correction.
Bitcoin is currently trading around the $81,000 level, which is slightly below the minimum price achieved on the blockchain representing a major support level. The situation worsened yesterday with the crypto market's market cap declining by 6% due to investor concerns stemming from President Donald Trump's recent trade policies; escalating tensions regarding tariffs targeting the United States' key trading partners - Canada, Mexico, and China - have disrupted markets, triggering an intense sell-off of high-risk assets.
If the BTC price fails to remain above the current support level, it may head towards the $63,000 level, which corresponds to the minimum price achieved on the blockchain, which previously formed the most crucial price safety net during its sharp corrections.
On the other hand, the analyses of the crypto analyst at CryptoQuant highlighted the convergence of factors supporting a state of uncertainty, with the Bitcoin market facing a critical situation amid negative signals, declining demand, and a retreat in whale purchases, alongside outflows from Bitcoin ETFs, leaving investors questioning whether the negativity of these indicators is merely short-term disturbances or reveals deeper structural weakness in the Bitcoin market. Thus, the interpretation of these signals by investors in the coming weeks will determine whether the price of Bitcoin will witness strong rebounds or continue its downward trend.
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