Key Points
- Bitcoin’s active addresses signal a potential period of stagnation due to the emergence of a death cross.
- Despite recent gains, weakening market fundamentals may prevent a sustained upward trend for Bitcoin.
Bitcoin’s Potential Stagnation Phase
Bitcoin may be entering a period of stagnation, according to analysis by CryptoQuant analyst Yansei Dent. The analyst observed a death cross on the 30-Day Moving Average (DMA) and 365 DMA, which indicates a decline in short-term activity among investors.
Historically, similar patterns in active addresses have coincided with bearish market conditions. The analysis also shows a decline in transaction count since Q4 2024, further suggesting potential mid to long-term market stagnation.
Implications for Bitcoin’s Market
The emergence of a death cross and a decline in activity signal weakening market fundamentals for Bitcoin. This is evident in the declining NVT Golden Cross, which has reached a negative zone of -1.1.
When the NVT golden cross is negative, it indicates a decrease in Bitcoin’s market value relative to transaction activity. This is further confirmed by a negative price DAA Divergence, suggesting that the current Bitcoin value might be unsustainable.
Bitcoin’s fund market premium has also declined, indicating that futures prices are trading below spot prices. This suggests a high demand for short positions.
Despite Bitcoin reclaiming the $100k mark, the markets may not be healthy enough for a sustained uptrend. Current gains are primarily due to speculative activity, especially following the U.S. inflation data release. Hence, with weakening fundamentals, Bitcoin may continue to consolidate within a range of $94k and $100k.
