Recent statistics have unveiled a significant transformation in the overall cycle of the cryptocurrency market. Julio Moreno, a prominent analyst from CryptoQuant, has claimed that the Bull-Bear Market Cycle Indicator has signaled the onset of a BEAR market, suggesting a potential downturn in market conditions. This marks the first occurrence of such a signal since January of the previous year. Moreno shared the details of this development on his official X account.
For the first time since January 2023, the Bull-Bear Market Cycle Indicator has indicated a BEAR phase (highlighted by the high blue area). Notable previous instances of brief BEAR phase signals include the COVID-19 sell-off in March 2020 and the Chinese mining ban in May 2021.
The CryptoQuant analyst emphasized that the Bull-Bear Market Cycle Indicator has historically been effective in forecasting market trends. Functioning as a momentum metric, it assesses market sentiment by analyzing the disparity between the 365-day moving average and the Profit and Loss Index. This indicator is considered crucial for identifying market cycles.
Currently, the Bear Cycle indicator has dipped below the 0 level as well as its 365-day moving average, indicating a bearish market phase. Historically, this indicator has successfully flagged significant market transitions, such as the sharp sell-off during the COVID-19 pandemic in March 2020 and the events of May 2021.
This latest development suggests the beginning of a period characterized by declining prices and reduced returns. In previous instances, this indicator accurately predicted temporary bearish phases. Notably, it forecasted the start of the extended bear market back in November 2021, reinforcing its credibility. According to the CryptoQuant analyst, the current indication suggests that the market may be heading into a phase of price declines and diminished returns.