The Head of Research at CryptoQuant, Julio Moreno, has highlighted why Bitcoin might be at risk of further decline. According to Moreno, the Bitcoin Bull-Bear Market Cycle Indicator—a metric based on the P&L Index—is nearing bearish territory.
The indicator measures the health of the market by comparing the P&L Index to its 365-day moving average (MA). Currently, Bitcoin's position is precarious since the metric hovers close to neutral, suggesting a potential dip back into bearish trends.
Historically, Bitcoin's all-time highs have aligned with extreme values on this indicator. Despite occasional pullbacks, the metric has retained a bullish posture until recently. Moreno warns that recent data shows waning momentum, which might lead to further corrections.
Bitcoin's recovery has slowed, with its price lingering around $58,500. This fragile position underscores the risk Moreno identifies, as the cryptocurrency remains vulnerable to additional market corrections.
