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Bitcoin has been unable to break the downtrend that began in October. Despite numerous attempts to rise, BTC has been unsuccessful and has been trading around $84,000-$95,000 for months.
This situation has fueled bearish sentiment for Bitcoin, and a CryptoQuant analyst has issued a warning. Woominkyu, an analyst at CryptoQuant, noted that Bitcoin’s ‘Supply Loss’ data has recently entered an upward trend again, warning investors of a potential bear market.
Bearish Signal for Bitcoin!
At this point, the analyst stated that “Bitcoin’s lost supply has started to trend upward again, which is a signal that has been repeatedly observed in the early stages of bear markets in past cycles.”
He added that this situation indicates a phase where losses are beginning to spread from short-term investors (STH) to long-term investors (LTH).
Missing Supply is an indicator that shows the portion of Bitcoin’s total supply that was purchased at prices higher than the current price.
The analyst stated that the consequences of a change in the direction of Bitcoin’s lost supply are significant for the price, adding that an increase in lost supply signals further declines/a bear market.
“In past cycles such as 2014, 2018, and 2022, this indicator had made an upward reversal before a true market bottom formed.”
Prices then continued to weaken, and the true bottom only occurred after Lost Supply rose much more sharply.
The analyst concluded by adding that while the supply loss remains relatively low compared to past levels, this upward movement in supply loss suggests that the market may be entering a bear market phase rather than a temporary pullback within a bull market.
“Currently, Lost Supply remains well below its historical capitulation levels, but the change in direction itself is significant. This suggests the market may be transitioning into a bear market structure rather than experiencing a temporary pullback within a bull trend.”
*This is not investment advice.