Bitcoin (BTC) has recently seen a modest recovery, reaching the $100k mark after a 2.58% daily gain. However, the cryptocurrency’s price has experienced a pullback, which has left analysts speculating about the potential for stagnation in the coming weeks and months. A significant technical development, the “death cross,” has emerged on Bitcoin’s moving averages, signaling possible market weakness and a period of consolidation ahead.
The death cross is a well-known technical pattern in financial markets, occurring when a short-term moving average crosses below a long-term moving average. In Bitcoin’s case, the 30-day moving average (DMA) recently fell below the 365-day DMA. This crossover has historically signaled a decline in market momentum, often marking the beginning of a bearish phase or extended stagnation.
In technical terms, the death cross suggests that short-term price movements may not be strong enough to sustain the current upward trajectory, indicating potential price declines or long periods of sideways movement. CryptoQuant analyst Yansei Dent has pointed out that this pattern, combined with other signs of weakening market activity, is cause for concern among traders and investors.
Alongside the death cross, Dent has highlighted a concerning trend in Bitcoin’s active addresses. Active addresses are often used as an indicator of network usage and investor interest. A decline in active addresses typically correlates with lower engagement from investors, a potential sign of waning momentum. Bitcoin has seen a steady decrease in active addresses since Q4 2024, which further strengthens the argument for a potential stagnation phase.
This reduced activity suggests that investors may be pulling back, whether due to caution or a belief that Bitcoin’s price has reached a temporary plateau. As the number of active addresses continues to drop, market enthusiasm appears to be cooling off, reinforcing the bearish outlook.
Bitcoin’s Network Value to Transaction (NVT) Golden Cross is another technical indicator pointing to a potential market slowdown. The NVT Golden Cross measures the relationship between the market value of Bitcoin and the transaction volume occurring on the network. When this indicator falls into negative territory, as it has recently, it signals that Bitcoin’s market value is no longer supported by adequate transaction activity.
Currently, Bitcoin’s NVT Golden Cross stands at -1.1, a negative reading that points to weakening market fundamentals. A declining NVT Golden Cross often precedes periods of stagnation or price correction, suggesting that Bitcoin may be entering a phase where its market value is detached from real network activity.
Another metric indicating a potential downturn is Bitcoin’s fund market premium. Currently, the fund market premium has dropped to -0.08, meaning futures prices are trading below spot prices. This situation typically reflects higher demand for short positions, signaling investor skepticism about the cryptocurrency’s future price performance. A negative premium indicates that many traders are betting against Bitcoin’s price rise, further suggesting a weak market sentiment.
Despite Bitcoin’s recent recovery to $100k, the underlying market indicators suggest that a sustained uptrend may not be in the cards for the immediate future. Speculative activity, particularly around U.S. inflation data, appears to be driving the current price movement, rather than strong, lasting demand. With the emerging death cross and other weakening metrics, Bitcoin is likely to trade within a range of $94k to $100k in the short term.
The recent pullback in Bitcoin’s price, coupled with the emergence of the death cross and weakening network activity, suggests that Bitcoin may be entering a period of stagnation. With declining active addresses, negative technical indicators, and increased demand for short positions, BTC may struggle to maintain momentum. While Bitcoin may continue to see minor fluctuations, it’s likely to consolidate within the $94k to $100k range until more favorable market conditions emerge.
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