Bitcoin Brakes? CryptoQuant Signals Looming Market Cool-Off

Bitcoin's bull run might be hitting a speed bump—analytics firm CryptoQuant flashes warning signs of slowing momentum.

Metrics Don't Lie:
On-chain data suggests dwindling exchange inflows and lethargic whale activity—classic pre-cooloff patterns. Retail FOMO? Nowhere in sight.

Traders Take Note:
While BTC hovers near all-time highs, the smart money's sniffing out fatigue. 'This isn’t a crash alert—just a reality check,' quips one analyst. 'Even crypto markets need coffee breaks.'

The Silver Lining:
History shows these pauses often precede bigger rallies. Meanwhile, Wall Street still can’t decide if Bitcoin’s a commodity, security, or existential threat to their bonus pools.

In brief

• Bitcoin pulls back after reaching a historic record of $123,000, marking the start of a consolidation phase.
• The Bull Score Index falls from 80 to 60, a sign of declining momentum while remaining in bullish territory.
• Stablecoin liquidity growth slows sharply, while network activity and flows to major exchanges decline.
• Valuation indicators approach critical thresholds, increasing the risk of a shift towards a bearish cycle.

The cooling of bullish momentum

Capitals are increasingly fleeing bitcoin for Ethereum. “After reaching an all-time high of $123,000, bitcoin has entered a bullish lull phase”, observes CryptoQuant in its latest report.

One of the most telling signals is the drop of the Bull Score Index, from 80 to 60, illustrating a market slowdown while remaining in bullish territory. The firm also observes a clear slowing of stablecoin liquidity growth, a key indicator of fresh capital inflow, now shown in red on its dashboard.

Among the elements that reflect this slowdown, note the following :

• The decline in stablecoin liquidity growth ;
• Network activity retreat : decrease in bitcoin transaction volume ;
• Decline in flows to major exchanges : notably Coinbase, a sign of weakening short-term demand ;
• Massive profit-taking : the on-chain trader profit margin indicator turned red, reflecting gain locking and decreasing unrealized profits ;
• Low seasonal dynamism : the summer period, historically marked by lower volumes, accentuates this slowdown.

This set of factors shapes a market losing momentum but without immediate challenge to its bullish structure.

Indicators close to tipping point

Beyond this cooling, CryptoQuant draws attention to valuation indicators dangerously close to critical levels.

“The Bull-Bear Cycle Market Indicator, the P&L Index, and the MVRV Z-score are now close to thresholds where a new correction could flip them into bearish territory,” the report notes.

Such a development could drive the Bull Score Index below 40, a level not seen since April 2023. This potential fragility adds to a context of sluggish liquidity growth, with Tether (USDT) expansion limited to $9.6 billion over the past 60 days.

The analysis highlights that this setup exposes the bitcoin market to any new selling pressure, especially in the absence of immediate bullish catalysts. Summer, often synonymous with decreased institutional investor activity, contributes to this cautious climate. However, CryptoQuant avoids pessimism, reminding that the overall cycle structure remains bullishly oriented.

The picture drawn by CryptoQuant suggests less a sharp reversal and more a transition phase. Investors must navigate a market oscillating between consolidation and correction threat, awaiting a trigger capable of reigniting bullish momentum. The evolution of capital flows and the emergence of new macroeconomic trends could determine whether this cooling is just a technical pause… or the signal of a deeper reversal.

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