Crypto Market Still in Bull Cycle But There Are Worrying Signs: CryptoQuant

The crypto market is in the red amid significant bloodshed from bitcoin (BTC) and altcoins. There is currently no bullish momentum, and BTC is hovering around key levels, falling below traders’ on-chain realized price of $65,800.

Regardless, CryptoQuant analysts insist in a recent report that the market is in a bull season.

Lack of Bullish Momentum

The lack of bullish momentum in the crypto market is evident in weak bitcoin whale demand growth and low stablecoin liquidity. Demand from large BTC holders has no strength and is growing at a monthly rate of 4.8%. Although the current rate is slightly higher than the 2.4% seen in late May, it is still a far cry from the 6%-10% recorded in the first quarter of this year, when BTC rallied to its all-time high.

In addition, traders’ demand for BTC is yet to reignite, as seen in on-chain data, which suggests that they are not purchasing the asset at the moment. This cohort of investors has been diminishing their holdings since bitcoin’s price touched $70,000 in late May.

Stablecoin liquidity, correlated with price rallies, has continued to go low, recording the slowest pace since November 2023. Tether’s (USDT) 60-day market capitalization growth has slowed from $12.6 billion in late April to $3.7 billion currently. The crypto market needs higher stablecoin liquidity for prices to surge.

BTC Could Hit $60K

Furthermore, the demand for bitcoin and ether (ETH) from United States investors is still at its weakest, which is evident in the BTC and Ethereum Coinbase Premiums staying below zero since May 20. U.S. investor demand growth is a significant driver for BTC and ETH prices.

The weak demand from U.S. investors can also be seen in spot Bitcoin exchange-traded funds, which have been on an outflow streak since June 13. The funds have collectively lost over $100 million every trading day in the past week.

“Indeed, CryptoQuant’s Bull-Bear Market Cycle indicator is still trending downwards, signaling we remain in a bull market but without much upward momentum. The index is at its lowest level since October 2023 and below its 30-day moving average. A crossover it’s 30-day moving average is needed for the index to signal upward bull momentum,” CryptoQuant stated.

Meanwhile, BTC could decline further to $60,000 since it has fallen below traders’ on-chain realized price.