CryptoQuant: Weak market demand indicates that the current rally is only a bear market rebound, and Bitcoin's trend is very similar to that of 2022

BlockBeats News, January 17 — On-chain data analytics firm CryptoQuant points out that Bitcoin’s recent price rebound appears more like a short-term rally rather than a sustained recovery, as market demand remains weak.

CryptoQuant stated in its Friday report: “Bitcoin has risen 21% since November 21, which seems to be a bear market rally. Demand conditions have slightly improved but still remain weak.” A bear market rally refers to a sharp price rebound within an overall downward trend, but it does not change the fundamental bear market structure. Research director Julio Moreno said that behind this Bitcoin rebound, the trend of persistent demand contraction continues.

After dropping about 19% and falling below the 365-day moving average, Bitcoin has risen approximately 21% since November 21. CryptoQuant considers this moving average as a key dividing line between bull and bear markets; once Bitcoin falls below this line, a bear market is confirmed. Analysts note that the current price movement is highly similar to the situation in 2022 — when Bitcoin also experienced a strong rebound after breaking below the 365-day moving average but was halted near this line and resumed its decline.

According to CryptoQuant data, Bitcoin is once again approaching this long-term moving average (currently around USD), but has not yet recovered it. The firm states that in past bear markets, similar failures to reclaim this line often triggered a new downward wave. “At that time, many market participants believed the bear market was over, the four-year cycle had failed, and a super cycle was imminent — this sentiment is quite similar to the current market,” CryptoQuant wrote. “However, the fundamentals and various technical indicators still show that we are in a bear market.”