Key highlights:
- The percentage of Bitcoin UTXOs in loss has declined, setting up the conditions for a strong bull run
- CryptoQuant’s Crypto Dan argues that the falling metric decreases the chance for a return to a bear cycle
- However, there are concerns that macroeconomic conditions and regulatory pressure can stifle Bitcoin’s run
“A decline of this magnitude carries enough strength to shift the market from a bearish cycle into a bullish one,” wrote Crypto Dan.
In his analysis, Crypto Dan argues that a return to a bear cycles is unlikely given the decline in percentage of UTXOs in loss. Previously, CryptoQuant adopted a cautious stance, noting that Bitcoin price will have to clinch $83,000 before a bull market becomes official amid fears of a fakeout.
At the moment, Bitcoin is trading at $76,616, surging by almost 2% over the last day. Zooming out, Bitcoin’s outlook turns bullish with the asset climbing by over 20% in the last 30 days.
Macro risks still threaten Bitcoin
CryptoQuant’s Crypto Dan argues that Bitcoin still faces several short-term headwinds that can challenge the improving on-chain picture.
Right off the bat, the analyst pointed to the recent interest rate hike as a major factor threaten to dampen the enthusiasm of the broader market. Furthermore, he pointed to the failure of the CLARITY Act to advance in the US Senate as another factors weighing on market sentiment.
Recent selling has also shown that some newer Bitcoin holders remain under pressure. CryptoQuant data cited in recent market analysis showed short-term holders sending as much as 34,000 BTC to exchanges over a 24-hour period, with 23,200 BTC transferred at a loss during the latest capitulation event.
Despite the streak of challenges, Bitcoin price has held steady. The premier cryptocurrency has absorbed the shock of the legislative disappointment from CLARITY Act and the Federal Reserve’s interest rate hike.
Crypto Dan added that the raft of challenges will not reverse the structural market changes underpinning Bitcoin.
“However, it seems unlikely that these short-term headwinds alone will completely reverse the on-chain structural changes already taking place and push the market back into a full bear cycle,” said Crypto Dan.
Source:: Bitcoin Bear Market May Be Losing Its Grip as UTXOs Move Into Profit