In the previous week, Bitcoin [BTC] experienced a rise, temporarily reaching the $60k mark.
Following a week where Bitcoin hit local lows, it attempted to sustain an upward trajectory but ultimately slipped below $60k once more. Market discussions are now revolving around the current conditions.
Renowned crypto analyst Ali Martinez indicated that a complete reversal of the trend might not have taken place, pointing to Bitcoin’s transaction volume.
Current Market Sentiment
In Martinez’s assessment, the decreasing trading volume indicates that a reversal in the trend has not materialized.
As per this evaluation, during upward trends, Bitcoin transaction volume typically sees a rise while it diminishes during downtrends. Thus, the present scenario of dwindling trading volume signals a continuing downtrend in the market.
During an uptrend in prices, transaction volume tends to surge as more participants engage in buying and selling activities, leading to heightened market dynamics.
Hence, an upsurge in volume usually confirms the robustness of an upward trend, reflecting increased investor activity.
Conversely, in a market downturn, volumes decrease, indicating fewer active participants. This indicates that bearish market sentiment still prevails.
Notably, Martinez highlights that Bitcoin’s trading volume dropped by 58.66% in the past day. Therefore, according to this analysis, BTC is yet operating in a bearish market environment.
Analysis of BTC Charts
As pointed out by Martinez, despite BTC’s attempts to push beyond, bearish forces maintain dominance in the market. Thus, the ongoing market conditions might pave the way for a Bitcoin decline.
For instance, Bitcoin’s fund flow ratio has decreased in the past week, indicating reduced buying activity compared to selling, suggesting a lack of investor inflow into the market.
This underscores a bearish market sentiment as investors close their positions, contributing to downward price pressures.
Moreover, Bitcoin’s net realized profit/loss has seen a recent decline after a spike in preceding days. A drop in NRPL signifies that investors are offloading at losses.
This patternsuggests a decreased demand for BTC as fewer buyers show willingness to purchase at higher prices or engage in trading activities.
Lastly, Bitcoin’s price DAA divergence has persisted over the recent week. A negative DAA divergence indicates rising Bitcoin prices alongside a decline in daily active addresses.
This hints that while prices climb, the network’s fundamental use is not keeping pace, portraying a bearish scenario as the price surge appears speculative.
In conclusion, as Martinez emphasizes, Bitcoin remains in a bearish trend. Hence, if this adverse market sentiment persists, BTC is at risk of dropping to $57,342.