Bitcoin's Recent Price Surge Likely a Bear Market Rally, Says CryptoQuant

According to BlockBeats, on January 17, blockchain data analysis firm CryptoQuant highlighted that Bitcoin's recent price increase appears to be a temporary rise rather than a sustained recovery, as market demand remains weak. In a report released on Friday, CryptoQuant noted, "Bitcoin has risen 21% since November 21, which seems to be a bear market rally. Although demand conditions have slightly improved, they remain weak." A bear market rally refers to a sharp price increase within an overall downward trend, without altering the fundamental bear market structure. Research director Julio Moreno stated that despite Bitcoin's recent surge, the trend of declining demand continues. Bitcoin had previously fallen approximately 19% and dropped below the 365-day moving average before rising about 21% since November 21. CryptoQuant considers this moving average a critical boundary between bull and bear market conditions, confirming a bear market once Bitcoin falls below it. Analysts pointed out that the current price movement is highly similar to the situation in 2022, when Bitcoin also rebounded strongly after breaking below the 365-day moving average but faced resistance near the average and resumed its decline. According to CryptoQuant data, Bitcoin is currently approaching this long-term moving average again, which is around $101,000, but has not yet successfully reclaimed it. The company noted that in past bear markets, similar failures to recover this average often triggered new rounds of decline. "At that time, many market participants believed the bear market had ended, the four-year cycle was invalid, and a super cycle was imminent—sentiments quite similar to the current market," CryptoQuant wrote, "However, fundamentals and various technical indicators still show we are in a bear market."