CryptoQuant: Weak market demand suggests the current rally is merely a bear market bounce; Bitcoin's price action is highly similar to that of 2022.

According to Mars Finance, on January 17th, on-chain data analytics firm CryptoQuant pointed out that Bitcoin's recent price rebound is more of a short-lived rally than a sustained recovery, as market demand remains weak. CryptoQuant stated in a report on Friday, "Bitcoin has risen 21% since November 21st, which appears to be a bear market rally. While demand has improved slightly, it remains weak." A bear market rally refers to a sharp price increase within an overall downtrend, but it does not change the fundamental bear market structure. Research Director Julio Moreno stated that the continued contraction in demand behind Bitcoin's current rally persists. Bitcoin has risen approximately 21% since November 21st after previously falling about 19% and breaking below its 365-day moving average. CryptoQuant considers this moving average a key dividing line between bull and bear markets; once Bitcoin breaks below this moving average, a bear market is confirmed. Analysts point out that the current price movement is highly similar to the situation in 2022—when Bitcoin also rebounded strongly after breaking below its 365-day moving average, only to be resisted near that level and resume its decline. According to CryptoQuant data, Bitcoin is currently approaching this long-term moving average (around $101,000) again but has not yet successfully recovered it. The company stated that in past bear markets, similar failures to recover this moving average have often triggered a new round of declines. "Many market participants at the time believed the bear market was over, the four-year cycle had failed, and a supercycle was imminent—a sentiment quite similar to the current market," CryptoQuant wrote. "However, fundamentals and technical indicators still suggest we are still in a bear market."