Crypto Market Cycle Indicator Shows Bearish Signs, But Here’s Why You Shouldn’t Worry

In a post on X on August 6, CryptoQuant head of research Julio Moreno reported that the chain analytics firm’s “Bull-Bear Market Cycle Indicator” has marked a bearish phase for the first time since January 2023.

The move follows a major market crash that saw about $500 billion wiped out in less than a week.

However, there is no reason to panic yet, as this indicator has shown bearish warnings during previous bull market cycles that have continued to all-time highs.

The Bull-Bear market cycle indicator has marked the BEAR phase (high blue area) for the first time since January 2023.

Other periods when it has marked BEAR phases for a limited period have been the COVID sell-off (March 2020) and the Chinese mining ban (May 2021). Then… pic.twitter.com/hwJRFjJuFg

— Julio Moreno (@jjcmoreno) August 6, 2024

Bull or bear market

Other periods when the indicator marked bearish phases for a limited period were the event and the black swan sale of the Covid-19 in March 2020 and the Chinese ban on crypto mining in May 2021. However, he correctly anticipated the beginning of the bear market in the he added the peak of the cycle in November 2021.

While it’s true that most altcoins are still in a bear market, Bitcoin currently sits just 22.5% from its all-time high, which doesn’t sound bearish at all. Analysts seem to be on the fence about bull/bear market conditions.

Earlier this week, crypto trader “Philakone” told his 148,000 X followers that there was a “25% part of me” that believed BTC had peaked for this cycle and is starting a major fix, which no one has accepted yet.

“This would mean that a major bear market has started and $25,000 to $30,000 is the next target that will eventually destroy the market.”

However, technical analyst ‘Titan of Crypto’ claimed that the bull market was still on in a post on X on August 6. The trader referenced the 38.2% Fibonacci retracement level, stating: “As long as the price closes above, the bull market is still on.”

#Bitcoin The bull market is still underway. 📈

The only metric you need to monitor to know if #BTC is still in a bull market is:

👉 The 38.2% Fibonacci retracement level.

As long as the price closes above, the bull market is still in motion. pic.twitter.com/VZln3iTF45

— Titan of Crypto (@Washigorira) August 6, 2024

Crypto market outlook

Crypto markets have marginally recovered from their big rout earlier this week, with total market capitalization recovering $2.1 trillion.

Bitcoin prices took advantage of $57,000 on August 6, a 14% gain from their plunge below $50,000 the previous day. The asset is currently trading up 2.6% on the day to a touch below $57,000.

Ethereum has been slower to react. It retook the $2,500 price level, but didn’t advance much further from there despite another solid day of positive US ETF inflows.

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