[Crypto Asset Analysis] Examining the Possibility of a Bitcoin Bull Market End

Warning bells are recently ringing in the Bitcoin market, which has shown a record-breaking rally. In this post, we will examine the sustainability of the Bitcoin bull market by analyzing the objective bearish signals and key data indicators currently appearing in the market.

Is the Bitcoin Bull Market Really Over? | Bearish Reversal Signals and Key Indicator Analysis

1. Market Overheating Signals and Technical Analysis

All asset markets repeat cycles of overheating and cooling, and no rally lasts forever. Recently, several technical overheating signals that appeared at the peaks of past bull markets are being detected in the Bitcoin market.

First, key Moving Average support lines are being threatened. Short-term and mid-term moving averages are key indicators of trend strength, and if the price breaks below them, it can be interpreted as an early sign of a trend reversal. The current precarious movement of the Bitcoin price above major support lines is evidence of unstable investor sentiment.

Second, a 'Bearish Divergence' is being observed in the Relative Strength Index (RSI). This phenomenon occurs when the price continues to rise, hitting new highs, while the RSI indicator forms lower highs. This discrepancy is a classic bearish signal, suggesting that buying pressure is weakening and the upward momentum of the price is being exhausted.

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2. Macroeconomic Headwinds: High Interest Rates and Reduced Liquidity

The crypto asset market is no longer an isolated island; it moves in close connection with the global macroeconomic situation. The current market environment is by no means favorable for risky assets like Bitcoin.

Central banks around the world, including the U.S. Federal Reserve (Fed), are maintaining high-interest-rate policies for a considerable period to curb inflation. High interest rates increase the attractiveness of safe-haven assets while dampening investment demand for risky assets. Considering that Bitcoin rose sharply during past periods of abundant liquidity, the current tightening stance is bound to be a significant burden.

Furthermore, geopolitical risks and concerns about a global economic slowdown are also factors causing investors to reduce their exposure to risky assets and move towards safer ones. As long as these macroeconomic headwinds persist, the prevailing analysis is that it will be difficult for the Bitcoin price to replicate its previous explosive rally.

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3. On-Chain Data Analysis: The Movement of Smart Money

On-chain data, which analyzes the flow of data on the blockchain, is a useful tool for glimpsing the sentiment and behavior of market participants. Several concerning changes have recently been detected in on-chain data.

• Increase in Bitcoin Deposits to Exchanges: Generally, investors move assets from their personal wallets to exchanges to sell them. The recent trend of increasing net Bitcoin deposits to exchanges over the past few weeks signifies that potential selling pressure is rising.
• Decreased Activity from Whale Investors: Large-scale, long-term holders known as 'whales' are showing movements of gradually selling off their holdings or taking a wait-and-see approach, rather than making new purchases. The slowdown in the activity of this 'smart money' that used to lead the market can be interpreted as a sign of a lack of confidence in further upside.
• MVRV Z-Score: Analyses also show that the MVRV Z-Score indicator, used to determine the market's overvaluation or undervaluation, has entered an 'overheated' zone similar to the peaks of past bull markets. This suggests the possibility that the current price may be somewhat overvalued compared to its intrinsic value.

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4. Conclusion: A Time for Cautious Response, Not Premature Optimism

As we have seen, the current Bitcoin market is showing increasing downward pressure from various aspects, including technical analysis, the macroeconomic environment, and on-chain data. It seems clear that the momentum of the bull market that has continued since 2023 has weakened considerably.

Of course, positive factors such as the approval of spot Bitcoin ETFs are supporting the market, so it is too early to declare a sharp collapse. However, rather than adhering to the unconditional optimism of the past, it is time to recognize potential risks and establish a more cautious investment strategy. While no one can predict the market's direction with 100% certainty, an attitude of preparation is necessary. Please refer to the article below (Bitcoin Q4 Market Outlook) to prepare for the future with a better investment strategy.

▶ Go to the article on Bitcoin's Q4 Market Outlook

Key Summary:
The current Bitcoin market faces growing downward pressure from technical, macroeconomic, and on-chain data perspectives. A cautious, data-driven approach is needed at this time, rather than the unconditional optimism of the past.

The content of this blog is for reference purposes for investment decisions only, and investment decisions must be made based on individual judgment and responsibility. Under no circumstances can the information on this blog be used as evidence for legal liability for investment results.