As the effects of the bear market, which has lasted for approximately 9 months, continue, the cryptocurrency analysis company The DeFi Report evaluated Bitcoin’s on-chain data and macroeconomic outlook in its latest video report.
According to analyst Mike’s assessment, while the market is starting to show green lights for “buying,” the possibility that a definitive bottom has not yet been reached remains.
One of the most important technical indicators highlighted in the report is Bitcoin trading below its 200-week moving average (approximately $62,400). Analysts noted that the price is fluctuating between $59,000 and $60,000, adding that historically, Bitcoin hasn’t spent much time below these levels, and this generally signals a significant cycle bottom.
Four out of six key on-chain indicators (KPIs) tracked by The DeFi Report are currently giving a clear bullish signal:
- Loss-Making Supply: More than 48% of the circulating Bitcoin supply is currently at a loss. Looking at the situation of long-term holders, it appears that the market is very close to the lows of past bear markets.
- Missing Pieces: Two key indicators not giving a bullish signal are the Realized Market Value (RMV) and MVRV ratios. According to analysts, there hasn’t been enough “capital destruction” or change of hands in the market yet to fully confirm the final lows of past cycles.
Potential macroeconomic risks that could shake markets and trigger a final wave of capitulations in crypto assets are listed as follows:
- Markets are pricing in a 70% probability of a potential interest rate hike in September. The Fed’s commitment to bringing inflation down to 2% could create renewed selling pressure in equity and crypto markets.
- A sharp 20-25% pullback in NASDAQ or AI-focused technology stocks in general could drag the crypto market down with it.
- Despite the Bank of Japan (BOJ) raising interest rates to 1%, the highest level in 30 years, the continued depreciation of the yen poses a significant risk. This could lead global investors to close their cheap carry trades, resulting in a liquidity crunch.
Increased political polarization ahead of the US elections and consumer confidence index hovering at historically low levels are putting indirect pressure on risky assets.
