Bitcoin (BTC) has defied bearish valuation metrics, surging 7% in the past 24 hours despite weakening US demand and increasing market uncertainty. According to data from CoinMarketCap, Bitcoin is currently trading at $82,910, up from its 24-hour low of $79,356. This surprising rally has left analysts debating whether this is a short-term fake pump or a sign of renewed bullish momentum.
Bitcoin’s Bull-Bear Market Cycle Indicator Flashes Bearish
Leading on-chain analytics platform CryptoQuant has reported that Bitcoin’s valuation metrics remain in bearish territory despite the price surge. In its March 11 market report, CryptoQuant highlighted that Bitcoin’s Bull-Bear Market Cycle Indicator is at its most bearish level in this cycle.
Additionally, the MVRV Ratio Z-score, a critical metric for determining whether Bitcoin is overvalued or undervalued, has crossed below its 365-day moving average. Historically, this suggests that the upward price trend may have lost momentum. Yet, Bitcoin’s unexpected gains indicate that external market factors are influencing its price action.
Bitcoin Gains Amid US Market Stability and Political Developments
Bitcoin’s surge comes amid a stabilizing US stock market on March 11, following turbulence sparked by US President Donald Trump’s refusal to rule out a potential recession. Many investors had been cautious, fearing a downturn in economic growth and its impact on risk assets such as cryptocurrencies.
Moreover, a significant catalyst for Bitcoin’s gains appears to be Senator Cynthia Lummis’ reintroduction of the BITCOIN Act, which proposes that the US government acquire 1 million BTC over the next five years. This legislative move has fueled optimism among crypto investors, as large-scale government adoption could significantly impact Bitcoin’s long-term valuation.
Market Sentiment Remains Divided: Fake Pump or Sustainable Rally?
Despite the price surge, many traders remain skeptical about the sustainability of this rally. Crypto analyst Bitcoin Rachy dismissed the rally in a March 11 post on X (formerly Twitter), stating, “Fake pump, right?” Similarly, BitcoinHyper, another well-known trader, cautioned, “Every pump feels like the beginning. This is how the market takes your money.”
Such skepticism stems from the ongoing contraction in Bitcoin demand. According to CryptoQuant, Bitcoin demand in the United States dropped by 103,000 BTC last week, marking its fastest pace of contraction since July 2024.
US Bitcoin Demand in “Contraction Territory”
CryptoQuant attributes the declining demand for Bitcoin in the US to macroeconomic uncertainties, including concerns over inflation and new tariffs imposed by President Trump on February 1. Federal Reserve Chair Jerome Powell’s statement on March 7, reiterating that the Fed is in no hurry to adjust interest rates, has further contributed to investor caution.
Additionally, CryptoQuant notes that whales have slowed down their Bitcoin accumulation, and US-based spot Bitcoin ETFs have turned into net sellers of BTC. These factors suggest that institutional demand for Bitcoin may be weakening in the short term.
Bitcoin’s Price Trajectory: Key Support and Resistance Levels
Despite the recent price surge, Bitcoin remains down 14% over the past month. However, CryptoQuant suggests that this drawdown is not unusual in historical bull markets. Similar corrections have occurred before, but whether Bitcoin can sustain its gains remains uncertain.
Market analysts are watching Bitcoin’s key support levels between $75,000 and $78,000. If BTC breaks below this range, CryptoQuant warns that its next target could be as low as $63,000, a price level not seen since October 14, 2024.
Bitcoin All-Time High Still in Play?
Despite the bearish signals, some industry experts remain optimistic. Swan Bitcoin CEO Cory Klippsten told Cointelegraph that he believes there is a more than 50% chance Bitcoin will hit a new all-time high before June 2025. Bitcoin’s current all-time high of $109,000, reached on January 20, remains a key psychological level for investors.
What’s Next for Bitcoin?
Bitcoin’s recent rally defies bearish indicators, but uncertainties around US demand, macroeconomic conditions, and whale activity suggest caution. The upcoming months will be critical in determining whether Bitcoin can sustain its upward momentum or if further corrections are on the horizon. Investors should closely monitor macroeconomic trends, regulatory developments, and key support levels to gauge Bitcoin’s next move.
