- Bitcoin may face a prolonged period of stagnation when the Death Cross appears on the 30DMA & 365 DMA.
- BTC has recovered to the Medium level on the daily chart, increasing by 2.58%.
Over the past 24 hours, Bitcoin [BTC] has surged strongly, regaining the $100K level.
However, Bitcoin has seen an adjustment in the past few hours. At the time of writing, Bitcoin is trading at $99,417 after increasing by 2.58% on the daily chart.
This minor adjustment reflects the general difficulty of BTC in maintaining its upward momentum. This has led analysts to predict a bearish outlook for the cryptocurrency.
Meanwhile, CryptoQuant analyst Sei Dent has suggested that BTC may go through a medium to long-term period of price stagnation, with the appearance of the death cross being a marker.
Death Cross appears on Bitcoin's active addresses
In his analysis, Dent observed that Bitcoin has entered a stagnation phase, with active addresses showing a weakening momentum.
Source: Cryptoquant
According to him, the Death Cross has appeared on the 30-Day Moving Average (DMA) and 365 DMA. This Death Cross signals a decline in short-term activity among investors.
Historically, similar patterns in active addresses have coincided with bearish market conditions, acting as negative indicators.
Furthermore, the analysis shows that the number of transactions has declined since Q4 2024. This further reinforces the likelihood of a medium to long-term stagnation in the market.
Therefore, with the current situation, BTC may struggle to maintain its upward trend until the overall market improves.
What do the BTC charts signify?
Notably, the decline in activity and the appearance of the Death Cross signal a weakening in the market's fundamentals, which could make it difficult for BTC to sustain its upward trend.
Source: CryptoQuant
First, this short-term decline can be seen through the decrease in the NVT Golden Cross. It has dropped to the negative zone of -1.1 at the time of reporting.
When the NVT Golden Cross turns negative, it indicates that the market capitalization of Bitcoin is decreasing relative to its transaction activity.
Source: Santiment
This decline in network activity is further confirmed by the negative DAA divergence. This suggests that the market's fundamentals are weakening, and the current value of BTC may not be sustainable.
Source: CryptoQuant
The Bitcoin futures market premium has dropped to -0.08. When the futures market premium reaches this level, it indicates that the futures price is trading below the spot price. This suggests a high demand for short positions.
Although Bitcoin has regained the $100K level in the past day, the market is not strong enough to sustain a stable upward trend.
The current increase is driven by speculative activity, particularly after the release of U.S. inflation data.
Therefore, with a weakening foundation, BTC will likely consolidate within the range of $94K to $100K.
