The asset indeed dipped in the following days as it felt almost inevitable after such a gigantic jump, but went on the offensive once again in the following week or so. It rocketed past $82,000 on Friday before it was rejected following the US jobs report, and now sits below $80,000.
The report described the major profit-taking as a classic characteristic of a bullish cooldown, but warned that if they continue at such a rapid pace, the asset’s price could be primed for another correction. Historical occurrences have shown that $BTC tends to dump hard after a major rally if investors are not convinced about its potential.
“It is a hallmark of a bullish cooldown: bullish because it happens into strength, cautionary because concentrated realization can cap near-term upside,” reads the report.
Cooling Demand
CryptoQuant outlined another reason why $BTC could be primed for a more profound correction, even though it already slipped from $82,400 to $79,600. Its apparent spot demand briefly expanded by 43,000 units, marking its fastest growth pace of the year. However, that metric has lost its momentum and is now back in contraction.
US investors’ demand has weakened as well. The most used metric for this, the Coinbase Premium, measuring the price difference between the asset on the leading US exchange and other trading platforms, has returned to slightly negative territory at -0.05.
You may also like:
- Bitcoin’s $3K Drop Comes as Fed Rate Hike Bets Surge, but Analyst Remains Bullish
- Bitcoin Is Back Above $80,000, But Fidelity Says the Bear Market May Not Be Over Yet
- Bitcoin ETF Inflows Exceed $700M as Historical Pattern Points to $BTC Local Top
The analysts said similar periods of soft US spot demand have capped the cryptocurrency’s rallies three other times this year alone.
Nevertheless, the short-term picture does not necessarily mean that $BTC’s run is over and that it will return to a bearish phase. The Bull Score currently stands at 70, which is above the 60 threshold historically associated with sustainable bull markets.
” This keeps the broader picture constructive: Bitcoin remains in the early phase of a new bull market even as short-term momentum cools. The “official” bull market begins once price closes above its 365-day moving average,” they added, outlining that this key MA is located at around $83,000 – the level that stopped $BTC in May.
