Analysts at cryptocurrency research firm CryptoQuant say Bitcoin prices appear to have hit a bottom and recovered to a high near $66,000 earlier this week.
CryptoQuant noted in an analysis report published on Thursday that Bitcoin fell to a low of around $55,000 last week, causing investors to suffer their worst losses this year. Analysts said:
Bitcoin holders last week realized $2.5 billion in losses in just two days. This is usually a sign of seller capitulation and correlates with price bottoming.
Bullish on Bitcoin’s strength
The CryptoQuant report mentioned that unrealized losses among Bitcoin traders last week also reached their highest level in nearly two years. Analysts noted:
Traders’ unrealized returns are now -5.7%, compared to last week’s low of -17%, which is the “most negative level” since the collapse of the FTX exchange in November 2022. Prices typically bottom when traders' yields hit "extreme negatives," as seen last week.
The report added that various Bitcoin valuation indicators have recently rebounded from key levels, indicating that the price has bottomed and foreshadowing further strength for Bitcoin. CyptoQuant analysts have listed three chart indicators that suggest Bitcoin’s recent rally could turn into a long-term rally.
Analysts said: “The Bitcoin P&L Index broke through the 365-day moving average, the bull and bear market cycle indicator also broke through the 30-day moving average, and the Metcalfe price valuation range is the second time this year. Bitcoin prices provide support."
Stablecoin liquidity stalls
However, the report also pointed out that the current liquidity of stablecoins is still insufficient and is not enough to destabilize the bull market. Analysts said: "The necessary condition for Bitcoin's continued rise is ample stablecoin liquidity."
CryptoQuant’s report found that while stablecoin market capitalization has grown, USDT’s monthly market capitalization growth remains close to zero, “which inhibits the potential for Bitcoin to soar significantly.”
According to CoinGecko market data, Bitcoin has fallen 1.1% in the past 24 hours and is trading at $64,025 as of 11 a.m. today (19).
〈Bitcoin bottom signal appears! Analyst: Stablecoin liquidity is insufficient and cannot ignite the "big bull market". This article was first published on "Block Guest".
