Bitcoin has defied bearish market indicators, registering a 7% gain over the past 24 hours. This unexpected spike comes despite various valuation metrics signaling a downturn, along with a noticeable drop in U.S. demand.
Bitcoin Defies Bearish Market Signals
On-chain analytics firm CryptoQuant reported on March 11 that Bitcoin’s valuation metrics suggest the market is in a bearish phase. The Bitcoin Bull-Bear Market Cycle Indicator has reached its most bearish level in this cycle, while the MVRV Ratio Z-score—a key metric used to determine whether Bitcoin is overvalued or undervalued—has crossed below the 365-day moving average. This suggests that the previous bullish momentum may be losing steam.
At the time of publication, Bitcoin is trading at $82,910, bouncing back from a 24-hour low of $79,356, according to CoinMarketCap data.
U.S. Bitcoin Demand Declining at Its Fastest Pace Since July
A key concern for investors is the falling demand for Bitcoin in the U.S., with CryptoQuant reporting that demand contracted by 103,000 BTC last week alone—the sharpest drop since July 2024. This contraction is attributed to economic uncertainty surrounding U.S. inflation rates and policy shifts under President Donald Trump’s administration, particularly tariffs introduced on February 1.
Further compounding the bearish outlook, Federal Reserve Chairman Jerome Powell reiterated on March 7 that he was in no rush to adjust interest rates, leading to ongoing market uncertainty.
Is the Latest Bitcoin Pump a Temporary Rebound?
The 7% surge in Bitcoin’s price was largely driven by a positive reaction to U.S. Senator Cynthia Lummis’ reintroduction of the BITCOIN Act, which proposes that the U.S. government accumulate 1 million BTC over the next five years. While this development fueled bullish sentiment, many traders remain skeptical about the sustainability of the recent price jump.
Crypto analyst Bitcoin Rachy questioned the rally in a March 11 post on X (formerly Twitter), calling it a “fake pump.” Similarly, trader BitcoinHyper noted, “Every pump feels like the beginning. This is how the market takes your money.”
Bitcoin Price at Risk? Key Support Levels to Watch
Despite the recent rebound, CryptoQuant warned that Bitcoin’s next support levels are critical in determining its future trajectory. The firm emphasized that Bitcoin is still down 14% over the past month, making it susceptible to further declines.
If Bitcoin breaks its current support range between $75,000 and $78,000, analysts suggest that its next major target could be as low as $63,000—a level last seen on October 14, 2023.
ETF Sell-Offs and Whale Activity
Another worrying trend is that Bitcoin whales—large-scale investors—have slowed their accumulation, and spot Bitcoin ETFs in the U.S. have shifted to a net selling position. This indicates that major institutional investors are reducing their exposure, which could add selling pressure in the near term.
Will Bitcoin Hit a New All-Time High in 2024?
Despite the bearish indicators, some experts remain optimistic about Bitcoin’s long-term prospects. Swan Bitcoin CEO Cory Klippsten stated that he believes there is a “more than 50% chance” that Bitcoin will hit a new all-time high before the end of June 2024. Bitcoin’s last all-time high of $109,000 was recorded on January 20, 2024.
Historically, Bitcoin has experienced multiple pullbacks during bull markets, followed by strong recoveries. If the macroeconomic environment stabilizes and demand picks up, Bitcoin could still be on track for a historic rally later this year.
