U.Today – Bitcoin Market Update

Bitcoin (BTC), the largest cryptocurrency by market capitalization, rose to highs of $58,487 in early Thursday trading. However, amid this price rise, prominent crypto analyst Julio Moreno issued a warning, urging caution as the market heats up.

Moreno, Head of Research at CryptoQuant, indicates that valuation metrics show Bitcoin remains bearish. He stated that Bitcoin is still in a bear phase and has decoupled from gold as investors switch to a risk-off mode.

CryptoQuant’s recent analysis highlights that the Bull-Bear Market Cycle Indicator has been in a bear phase since August 27, when Bitcoin was priced at $62,000. A significant rally is unlikely so long as the indicator stays in the bear phase.

The MVRV ratio has fallen below its 365-day moving average since August 26, signaling the potential for further price corrections. This pattern was also observed in May 2021, when Bitcoin fell 36% over two months, and in November 2021, marking the start of the last bear market.

Bearish indicators can also be seen in the spending behavior of Bitcoin long-term holders (LTH), who have been spending at lower profit margins. The LTH SOPR ribbons have been steadily declining since late July, illustrating a lack of new demand for Bitcoin.

Bitcoin Briefly Hits $58,000

Bitcoin (BTC) surpassed $58,000 in Thursday trading, driven by a surge in U.S. equities and gains in Asian markets. U.S. inflation data for August positively impacted expectations for a Federal Reserve rate drop in the coming weeks, with core inflation rising faster than expected to over 0.3%.

At the time of writing, BTC had risen 2.18% in the last 24 hours to $58,025. However, U.S. spot Bitcoin exchange-traded funds (ETFs) experienced outflows on Wednesday, losing $43 million after a two-day influx of funds.