Bitcoin Warning Issued by Crypto Analyst Amid BTC Price Surge to $58,000
BTC, the largest cryptocurrency by market capitalization, reached highs of $58,487 in early Thursday trading. However, a cautionary note has been sounded by a prominent crypto analyst as the market heats up.
According to Julio Moreno, Head of Research at CryptoQuant, valuation metrics suggest that Bitcoin's price remains bearish. Moreno asserts that Bitcoin is currently in a bear phase and has separated from gold as investors shift to risk-off mode.
CryptoQuant's recent analysis reveals that the Bull-Bear Market Cycle Indicator has been in a bear phase since Aug. 27, when Bitcoin was priced at $62,000. The indicator staying in the bear phase indicates that a significant rally is unlikely to occur.
Additionally, the MVRV ratio has dipped below its 365-day moving average since Aug. 26, signaling the potential for further price correction. This scenario was observed in May 2021 and November 2021, leading to significant declines in Bitcoin's price.
Furthermore, bearish signals are apparent in Bitcoin long-term holders (LTH) spending at reduced profit margins. The LTH SOPR ribbons have been on a downward trend since late July, indicating a lack of new demand for Bitcoin.
Bitcoin briefly crossed the $58,000 mark in early Thursday trading, driven by a surge in U.S. equities and gains in the Asian share market. U.S. inflation data for August has fueled expectations of a Federal Reserve rate cut, with core inflation exceeding 0.3%.
As of the latest update, BTC has risen by 2.18% in the last 24 hours to $58,025. However, spot bitcoin exchange-traded funds (ETFs) in the U.S. experienced outflows on Wednesday after two days of inflows, losing $43 million.
In conclusion, while Bitcoin has seen a price surge, caution is advised based on the bearish indicators highlighted by CryptoQuant. Investors should be mindful of the potential for further price corrections and the lack of new demand for Bitcoin. Always consult with a financial advisor before making any investment decisions.