Bitcoin’s recent attempt to recover, the leading cryptocurrency has once again dipped below the crucial $60,000 mark. Over the last week, Bitcoin saw a notable 9.92% surge, briefly reclaiming the $60k level, but market analysts warn that this may not be a sign of long-term recovery. With declining transaction volume and other bearish indicators, Bitcoin’s market remains under pressure.

Temporary Gains, But Market Still Weak

Over the past week, Bitcoin (BTC) experienced a temporary boost, climbing back to $60k after hitting local lows. This surge was a moment of optimism for investors, but Bitcoin’s inability to hold this level has reignited concerns about the ongoing bearish market conditions.

Ali Martinez, a well-known cryptocurrency analyst, has highlighted that despite the upward momentum, the overall market trend remains bearish. According to Martinez, a crucial factor contributing to this pessimistic outlook is Bitcoin’s transaction volume, which has been steadily declining.

Transaction Volume Signals Trouble

In his analysis, Martinez points out that transaction volume plays a key role in determining the health of an uptrend or downtrend. During an uptrend, transaction volume tends to increase as more market participants actively buy and sell Bitcoin, reflecting higher levels of investor engagement. Conversely, during a downtrend, transaction volume declines, indicating that fewer investors are involved in market activities.

Currently, Bitcoin’s transaction volume has seen a sharp drop, falling by 58.66% over the past day alone. This significant decline suggests that the market is still in a bearish phase, and any recent price gains may be unsustainable.

Market Indicators Point to Bearish Sentiment

Several key market indicators also reinforce the idea that Bitcoin is still struggling. For instance, Bitcoin’s fund flow ratio—a metric that compares the volume of funds flowing into and out of Bitcoin—has declined over the past week. A lower fund flow ratio indicates that fewer investors are buying Bitcoin, while more are selling, contributing to downward price pressure.

Additionally, Bitcoin’s net realized profit/loss (NRPL) has also dropped in the last two days. The NRPL metric reflects whether investors are selling at a profit or a loss. The recent decline in this metric suggests that more investors are selling Bitcoin at a loss, further fueling the bearish outlook.

Negative DAA Divergence

Another bearish indicator is Bitcoin’s price Daily Active Addresses (DAA) divergence. This metric compares the price of Bitcoin to the number of active addresses on the network. Over the past week, Bitcoin’s price has risen, but the number of daily active addresses has not increased proportionally. This negative divergence signals that while Bitcoin’s price is climbing, fewer people are using the network, indicating that the price rise may be speculative rather than driven by real demand.

This disconnect between price and network activity is a red flag for investors. When prices rise but the network activity does not follow suit, it often indicates that the rally is unsustainable. As Martinez points out, this is another sign that Bitcoin’s recent gains may be short-lived, and the bearish market conditions could persist.

Could Bitcoin Drop Further?

With multiple bearish signals in play, Bitcoin is at risk of further price declines. Martinez warns that if the current negative market sentiment holds, Bitcoin could see its price fall to $57,342 in the coming days. This potential drop would put Bitcoin back near its recent lows, erasing much of the gains made over the past week.

The prevailing market sentiment remains cautious, and many investors are closely watching Bitcoin’s next moves. The combination of declining transaction volume, reduced buying activity, and lower network engagement all suggest that the road ahead for Bitcoin may be challenging.

Investors Await Clarity

For now, the future of Bitcoin remains uncertain. While some optimists believe that the recent price surge could be the start of a larger recovery, the data suggests otherwise. With declining transaction volumes and bearish market indicators continuing to dominate, Bitcoin could be in for another rough week.

As Bitcoin struggles to maintain its footing, investors are likely to remain on edge, waiting for clearer signs of a market reversal. Until then, caution may be the best approach as Bitcoin navigates these turbulent waters.