According to Julio Moreno, Head of Research at CryptoQuant, valuation metrics indicate that the price of Bitcoin remains bearish.
Moreno stated that Bitcoin is still in a bear phase and has decoupled from gold as investors switch to risk-off mode.
In its recent analysis, CryptoQuant highlighted that the Bull-Bear Market Cycle Indicator has been in a bear phase since Aug. 27, when the price of Bitcoin was $62,000. A significant rally is unlikely to occur as long as the indicator stays in the bear phase.
Similarly, the MVRV ratio has fallen below its 365-day moving average since Aug. 26. A cross below the 365-day moving average indicates the possibility of a further price correction. This situation was also present in May 2021, when Bitcoin fell 36% over two months, and in November 2021, when the last bear market began.
Bearish signs are also evident in Bitcoin long-term holders (LTH) spending at lower profit margins. The LTH SOPR ribbons have been drifting lower since late July. The fact that LTHs are spending at lower profit margins demonstrates a lack of new demand for Bitcoin.
U.S. inflation data for August bolstered bets on a Federal Reserve rate drop in the coming weeks, with core inflation rising faster than expected to more than 0.3%.
At the time of writing, BTC was up 2.18% in the last 24 hours to $58,025. However, spot bitcoin exchange-traded funds (ETFs) in the United States returned to outflows on Wednesday, following a two-day inflow streak, losing $43 million.
This article was originally published on U.Today
Source: Cryptocurrency - investing.com
