- BTC has surged 9.92% over the past seven days, but is back down at the time of writing.
- Despite the surge, BTC remains in a bear market, especially due to declining trading volumes.
Bitcoin last week [BTC] It briefly recovered to the $60,000 level.
Bitcoin hit a local low a week ago and attempts to maintain upward momentum failed as it fell below $60,000 again. Meanwhile, analysts have spoken out about the current market situation.
Popular crypto analyst Ali Martinez, citing Bitcoin trading volume, suggested that the trend reversal is not complete.
General market sentiment
According to his analysis, Martinez Pointing to the decline in trading volumes, it suggests that a trend reversal has not yet occurred.
Source: X
According to this analysis, during an uptrend, BTC trading volume increases and during a downtrend, it tends to decrease. Therefore, in the current situation, the market is still in a downtrend as trading volume is decreasing.
In fact, when prices are trending upwards, more investors are actively buying and selling, which increases trading volume and, as a result, market activity.
Therefore, an increase in trading volume usually confirms the strength of an uptrend as more investors are actively involved in the market.
Then, when the market is trending down, trading volume decreases. Low trading volume means fewer market participants, which suggests that bearish market sentiment is still prevalent.
As Martinez points out, Bitcoin trading volume has fallen 58.66% over the past day, so based on this analysis, BTC is still in a bear market.
What the BTC chart suggests
As Martinez noted, although BTC is attempting a breakout, the bears are still in control of the market, so Bitcoin could fall in the current market conditions.
Source: Cryptoquant
For example, Bitcoin's funds flow ratio has declined over the past week, meaning there is less buying activity compared to selling, meaning fewer investors are putting money into the market.
This indicates that the market is weakening as investors are liquidating their positions, contributing to downward pressure on prices.
Source: Cryptoquant
Additionally, Bitcoin's realized net gains/losses have declined over the past two days after surging the day before. The decline in NRPL means investors are selling at a loss.
Source: Santiment
This suggests that demand for BTC is declining due to fewer buyers willing to purchase at higher prices and/or reduced trading activity.
Finally, the DAA divergence in Bitcoin price has continued since last week: When the DAA divergence is negative, it means that Bitcoin price is increasing and daily active addresses are decreasing.
Read Bitcoin [BTC] Price forecast 2024-2025
This suggests that while the price is rising, the underlying usage of the network is not keeping up, which is bearish as the price increase is purely speculative.
Simply put, as Martinez points out, Bitcoin remains in a bearish trend, so if this negative market sentiment continues, BTC is at risk of dropping to $57,342.
