The recent 19% recovery in the crypto market has many investors believing that the bottom is out, but leading analytical platform DeFi Report issued a cautious statement.
Company founder Michael Nadeau said that despite market sentiment shifting in a bullish direction, on-chain data and macroeconomic liquidity conditions do not yet support this rally.
While assessing Bitcoin’s performance since its February lows, Nadeau pushed back against the market narrative that “this time is different, the four-year cycle is over.”
According to the analyst, market cycles are not based solely on “emotions” but on a distinct series of events such as capital creation and investor sentiment.
The DeFi report highlighted the correlation between global liquidity indices and Bitcoin prices, noting that Bitcoin typically peaks before liquidity peaks. Current data suggests that global liquidity is on the decline.
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Drawing comparisons to the 2022 bear market, Nadeau noted that Bitcoin has not yet spent enough time falling below its “realized price” and 200-day moving average. This suggests that the true capitulation phase may not yet have occurred in the market.
The decline in memecoin traffic and DEX volumes, especially on the Solana network, has been interpreted as a sign that the market is less willing to speculate.
According to an analytical report, Bitcoin needs to overcome several technical levels to prove that the current surge is sustainable.
$76,000: 100-day moving average level.
$81,000: Cost basis for short-term investors.
$85,000 – $87,000: Unless a weekly close above this region occurs, the current move is likely to remain a “bear market rally.”
*This is not investment advice.
