Bitcoin rally lacks the signals needed for a confirmed trend reversal, according to CryptoQuant. The onchain analytics firm said the move reflects a bear-market recovery despite stronger demand. Bitcoin has recovered from recent lows, but broader market indicators still show weak conditions.
Bitcoin rally remains within bearish market conditions
Bitcoin rally gained pace after the asset rebounded about 10 percent from last week’s low near $57,700. The move carried bitcoin back toward $63,000 and restored the $60,000 area as support. CryptoQuant said the rebound has improved near-term market structure, but not the wider trend.
The firm linked part of the move to Bitcoin’s strong historical performance during July. It said this month has often delivered gains, including during weak market cycles in 2018 and 2022. However, the Bitcoin rally still needs stronger confirmation from broader onchain indicators.
CryptoQuant’s head of research Julio Moreno said July trends support short-term upside.
“Over the past ten years, July has been one of Bitcoin’s more reliably positive months,” Moreno said.
Demand indicators improve but remain near neutral
Demand has improved after a sharp contraction in early June. The 30-day total demand metric has moved close to neutral after falling by about 650,000 BTC. Bitcoin rally has therefore coincided with easing pressure across spot and futures activity.
The firm said speculative futures demand has turned slightly positive during the recovery. It also said spot demand now contracts at its slowest pace since mid-May. Those changes show improvement, but they do not confirm a durable market turn.
“A move back into positive territory would confirm that the demand engine is re-igniting,” Moreno said.
The report also pointed to better U.S. exchange demand during the rebound. The Bitcoin rally followed a recovery in the Coinbase Premium Index from deeply negative early-June levels.
Valuation signals show recovery room, not reversal
As per CryptoQuant, the valuation data also supported the recent rebound from local lows. Traders’ unrealized profit margin fell below negative 24 percent in early June. That level moved far below the firm’s negative 12 percent undervaluation threshold.
The firm said such readings have often appeared near local market bottoms. Short-term holders tend to capitulate when unrealized losses reach extreme levels. The Bitcoin rally began as that pressure eased and the metric started recovering.
However, CryptoQuant said its Bull Score Index still shows bearish conditions. The index stands at 20, far below the 60 level needed for a sustainable rally. Therefore, the Bitcoin rally remains a recovery move until key market signals improve.
Bitcoin continues to trade above its recent low, and demand has shown early signs of repair. Moreover, the market lacks the breadth needed for a confirmed reversal. The Bitcoin rally remains tied to improving short-term conditions rather than a confirmed bull-market shift.
