Bitcoin (BTC) Price Slips Below $56,000 As On-Chain Metrics Flash Bearish Signals

Bitcoin price is down simply because there is no demand growth

Bitcoin has continued to trade sideways over the past few weeks, and the coin’s price has now slipped below an important price level. Here’s what some鏈接 on-chain metrics are saying about the asset’s price trajectory.

Bitcoin Price Drops Below Trader Cost Basis Level

As pointed out by a CryptoQuant analysis, a few on-chain indicators are currently giving out bearish signals for the original cryptocurrency. “Bitcoin price is down simply because there is no demand growth,” notes the analyst.

Related Reading | Bitcoin Momentum Indicators Are All Showing Death Cross: Say Hello To Bear Market?

To showcase how demand for the asset has been looking like, the analysis has attached the chart for the “Apparent Demand” indicator, which leverages on-chain data to estimate the 30-day demand for BTC among investors.

Demand for the asset had been high earlier in the year, as per this indicator. However, after peaking in April, the indicator sharply declined towards zero.

Since then, the Apparent Demand has continued to consolidate around this neutral level, which may be why the cryptocurrency’s price has been locked in an overall bearish trajectory.

The second indicator that the analysis has mentioned is the Bitcoin Bull-Bear Market Cycle Indicator. This metric combines a few BTC indicators related to profit and loss to generate one value that sums up the entire market.

From the graph, it’s visible that the the asset had been inside the historical “Overheated Bull” region from the perspective of CryptoQuant's Bull-Bear Market Cycle Indicator back when its price had set the all-time high (ATH).

After the coin had cooled off from this top, the indicator flashed a normal “Bull” signal, just like it had done in January and February. These bull market conditions were maintained until the crash early last month.

During this plunge, BTC dropped below $50,000, and the Bull-Bear Market Cycle Indicator flagged the market as “Bear.” Since then, the indicator has continued to consolidate around the transition boundary, jumping back and forth between Bull and Bear signals.

In the past week or so, though, the metric has consistently maintained inside the Bear region, which may be why Bitcoin has registered a drawdown of 6% in this window.

Related Reading | Dogecoin Among Altcoins Seeing Deepest Trader Losses: DOGE Rebound Soon?

Moreno has also pointed out a price level to watch, as BTC is quite close to retesting it. The level in question is the lower band of the average cost basis of the BTC traders.

At present, this level is situated around $55,500. It remains to be seen how a retest of this level goes if the cryptocurrency continues its decline.

BTC Price

Bitcoin is currently trading around $55,900, which means the coin is pretty close to retesting the trader above the cost basis level.

The above is the detailed content of Bitcoin (BTC) Price Slips Below $56,000 As On-Chain Metrics Flash Bearish Signals. For more information, please follow other related articles on the PHP Chinese website!