Analysts warn bear market continues despite Bitcoin's brief surge to $74K
Thursday's Bitcoin surge to $74,000 quickly lost steam with CryptoQuant confirming the ongoing bear market while experts caution that macroeconomic challenges could leave Bitcoin exposed to further volatility.
On Thursday, Bitcoin experienced a short-lived relief rally climbing past the $74,000 threshold, though this upward movement has already dissipated as market experts forecast that the ongoing bear market conditions will continue to suppress positive momentum.
On-chain analytics firm CryptoQuant declared on Thursday that "Bitcoin is still in a bear market despite the recent rally."
The company's Bull Score Index, which serves as a composite measurement tool evaluating Bitcoin's (BTC) overall market health through a blend of both fundamental and technical data points, continues to register at 10 out of 100, indicating conditions are "deep in bearish territory," according to the platform.
"Even after the recent price rally, fundamental and technical indicators still point to a bear market environment," the analytics firm noted.
"The current move is likely just a relief rally, not the start of a new bull phase."
On Thursday, Bitcoin momentarily reached a one-month peak of $74,000 on the Coinbase exchange, making contact with the 50-day exponential moving average, data from TradingView shows. Nevertheless, the cryptocurrency has subsequently shed more than $3,000 in value, dropping back beneath the $71,000 level during Friday's morning trading session.
Bitcoin still vulnerable to renewed downside pressure
In an interview with Cointelegraph, Nick Ruck, who serves as director of LVRG Research, explained that the digital asset market's latest relief rally occurred on the back of "renewed risk appetite and ETF inflows," though he warned that this upward movement has "quickly faced headwinds with prices pulling back toward $71,000 amid persistent macro uncertainties and fading momentum."
Although the temporary upward push delivered a much-needed relief rally supported by favorable liquidity conditions, "ongoing bear market dynamics reinforce caution as softer macro signals, like the anticipated slowdown in February nonfarm payrolls, keep cryptocurrencies vulnerable to renewed downside pressure," Ruck stated.
Bitcoin could see renewed buying interest
According to CryptoQuant, a positive Coinbase Premium reading has indicated resurgent purchasing interest from the United States, which has been the driving force behind the latest rally.
Demand for Bitcoin spot products from investors based in the United States has also transitioned from contraction to expansion, evidenced by the Coinbase Bitcoin Premium "switching from deeply negative territory in early February to the most positive since October," the analytics firm reported.
Additionally, selling pressure originating from both traders and long-term holders has diminished following unrealized losses hitting levels not witnessed since July 2022.
In the meantime, market analysts at SwissBlock noted on Friday that "momentum is flashing a critical shift," further stating "We're exiting peak negative momentum, the kind of transition that often precedes a regime change."