Bitcoin has not been able to break the downtrend that started in October. Despite multiple attempts to move higher, Bitcoin has been unsuccessful and has been trading around $84,000 to $95,000 for several months.
This situation is adding to the bearish sentiment towards Bitcoin, and CryptoQuant analysts have issued a warning. CryptoQuant analyst Wu Mingyu noted that Bitcoin’s “supply loss” data has recently entered an uptrend again, warning investors of a potential bear market.
Bitcoin bearish signal!
At this point, the analyst said, “Bitcoin’s supply loss has begun to trend upward again, a signal repeatedly observed during the early stages of bear markets in past cycles.”
He added that this situation shows that losses are starting to spread from short-term investors (STH) to long-term investors (LTH).
Missing Supply is an indicator of the portion of the total Bitcoin supply that was purchased at a higher price than the current price.
The analyst said that a change in the direction of Bitcoin’s supply loss will have a significant impact on the price, adding that increasing supply loss is a sign of further decline/bear market.
“In past cycles such as 2014, 2018, and 2022, this indicator would flip upwards before the true bottom of the market formed.”
Prices continued to fall after that, with the real bottom occurring after supply losses rose even more sharply.
The analyst concluded by adding that while supply losses remain relatively low compared to historical levels, the upward movement in supply losses suggests that the market may be entering a bear market phase rather than a temporary pullback from a bull market.
“While supply losses currently remain well below historical capitulation levels, the change in direction is itself significant. This suggests that the market is not experiencing a temporary pullback within a bullish trend, but may be moving into a bearish market structure.”
*This is not investment advice.
