Bitcoin’s record-setting run to $123,000 in June may have hit a temporary plateau, as fresh data from CryptoQuant points to a cooling of momentum and the possibility of mild short-term downside.
The firm’s latest analysis shows that the Bull Score Index — a proprietary measure of market strength — has slipped from 80 to 60 in recent weeks. While this level still indicates a generally bullish environment, the decline suggests enthusiasm is tapering off.
Analysts attribute the slowdown to two primary factors: profit-taking after the recent all-time high and the seasonal dip in trading volumes that often occurs during the summer months. Should the index fall below 40, it would be the first bearish reading since April 2023, potentially marking a notable sentiment shift.
On-chain signals echo the same caution. One of the clearest red flags is the stagnation in stablecoin liquidity, which often serves as a barometer for new capital entering the crypto market. Although Tether’s circulating supply has grown by $9.6 billion over the past 60 days, that growth has begun to lag behind its previous pace, indicating fewer fresh inflows from traders and institutions.
Profit-taking behavior is also showing up in the data. CryptoQuant’s profit margin signal has turned red, a sign that a large portion of market participants have recently locked in gains. As realized profits rise and unrealized profits shrink, buying pressure tends to fade, leaving prices vulnerable to short-term corrections.
Despite these headwinds, analysts are not calling for a prolonged downturn. Instead, they view the current phase as a consolidation period within the broader bull market. History shows that such pauses are common after rapid price increases, often giving the market time to reset before the next major move.
The big question is what will ignite the next leg higher. CryptoQuant Research Director Julio Moreno believes a U.S. Federal Reserve interest rate cut in September could serve as the spark. Markets have been anticipating such a move for months, and confirmation could unleash fresh buying momentum, especially if macroeconomic conditions align with a risk-on environment.
Until then, Bitcoin appears to be in a holding pattern, with traders watching both macroeconomic signals and on-chain flows closely for signs of the next breakout.
The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/bitcoin-rally-stalls-as-cryptoquant-signals-cooling-momentum/