Bitcoin’s Brief Rally Fades as Analysts Maintain Bearish Stance
Bitcoin (BTC) experienced a short-lived surge above $74,000 on Thursday, reaching a one-month high. However, the momentum quickly evaporated, with the price falling back below $71,000 by Friday morning, marking a loss of over $3,000 from its peak. This pullback has reinforced a prevailing analyst narrative that the cryptocurrency remains entrenched in a broader bear market, and the recent move was merely a corrective bounce rather than the start of a new bullish phase.
“Bitcoin is still in a bear market despite the recent rally,” stated CryptoQuant, an on-chain analytics firm. The platform’s Bull Score Index, a composite metric evaluating Bitcoin’s health through fundamental and technical data, remains at a deeply bearish 10 out of 100. “Even after the recent price rally, fundamental and technical indicators still point to a bear market environment,” their report concluded, adding, “The current move is likely just a relief rally, not the start of a new bull phase.”
Persistent Macro and Market Headwinds
Nick Ruck, Director of LVRG Research, told Cointelegraph that the rally was fueled by “renewed risk appetite and ETF inflows.” However, he cautioned that this advance “quickly faced headwinds with prices pulling back toward $71,000 amid persistent macro uncertainties and fading momentum.” Ruck highlighted that softer economic signals, such as the anticipated slowdown in February nonfarm payrolls, continue to keep cryptocurrencies vulnerable to renewed downside pressure. “Ongoing bear market dynamics reinforce caution,” he said.
The technical picture also shows weakening momentum. According to TradingView data, BTC has slipped 4.7% since Thursday’s high, with the price action stalling near the 50-day exponential moving average—a key level that often acts as resistance in a downtrend.
Contrasting Signals: US Demand Emerges Amid Bearish Backdrop
Despite the overall bearish metrics, some data points suggest emerging buying interest. CryptoQuant pointed to a positive Coinbase Premium—the price difference between BTC on Coinbase and global exchanges—as a signal of renewed US-based investor demand. This premium “switched from deeply negative territory in early February to the most positive since October,” indicating a shift from contraction to growth in spot demand from US investors.
Additionally, selling pressure from both traders and long-term holders has shown signs of easing. This follows a period where unrealized losses for holders reached levels not seen since July 2022, a condition that can often lead to capitulation selling or, conversely, a stabilization of the market as weak hands exit.
Analysts at SwissBlock offered a nuanced technical perspective on Friday, noting, “momentum is flashing a critical shift. We’re exiting peak negative momentum, the kind of transition that often precedes a regime change.” This observation suggests that while the immediate trend is bearish, the underlying momentum dynamics may be in the early stages of a potential shift, though no confirmation of a trend reversal has yet occurred.
This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.
