Bitcoin is currently displaying strong bearish signals, with key valuation metrics indicating weakness in the market. Demand for Bitcoin is contracting, whales are slowing down their accumulation, and spot Bitcoin ETFs have turned into net sellers. At present, the price of BTC stands at $82,706, which is approximately 32.39% below its all-time high. Over the last 30 days, the Bitcoin market has experienced a 15.3% drop, with a 5.8% decrease in the last seven days alone. This raises the question: Is this a normal market correction, or the beginning of a more significant downturn?
Bitcoin Metrics Turn Bearish
The CryptoQuant Bitcoin Bull-Bear Market Cycle indicator is currently at its most bearish level in this cycle. The MVRV Ratio z-score has fallen below its 365-day moving average, indicating a loss of upward momentum in the market.
Bitcoin Demand Is Weakening
According to the latest CryptoQuant weekly report, whales have slowed down their accumulation of Bitcoin. Additionally, Bitcoin ETFs in the US have transitioned from being buyers to net sellers in the market.
Yesterday, a significant amount of Bitcoin flowed out of the Spot ETF market, with at least 371 million leaving the market. Various Bitcoin ETFs, including GBTC, IBIT, FBTC, BITB, BTCO, HODL, and BRRR, saw outflows totaling millions. This decrease in apparent demand for Bitcoin resulted in a decline of 103,000 BTC last week, marking the fastest decline since July 2024.
The price of BTC started March at $84,352.73 and reached a peak of $94,302.78 on the second day of the month. However, the market experienced two significant corrections in March, with an 8.55% correction on March 3 and a 13.27% correction between March 6 and 10. Despite a slight increase in price from $78,629 to $82,922 yesterday, the current price of Bitcoin stands at $82,706.
How Deep Will This Correction Go?
With Bitcoin’s price currently 32.39% below its all-time high, the market has undergone a substantial correction. Valuation metrics indicate that this correction may be deeper than previous bull runs. If demand continues to weaken, Bitcoin could enter a prolonged bearish phase.
In conclusion, Bitcoin is facing significant bearish pressure due to shrinking demand and negative signals from key metrics. While corrections have occurred in the past, the severity of this downturn raises concerns about the possibility of Bitcoin entering a prolonged bear market.
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