Bitcoin Defies Bearish Indicators with 7% Rally Amid Market Uncertainty

Bitcoin has surged 7% in the past 24 hours, even as key market indicators suggest a bearish outlook and demand in the U.S. continues to decline. According to on-chain analytics platform CryptoQuant, Bitcoin’s valuation metrics remain in “bearish territory,” raising concerns about the sustainability of the recent price jump.

Bitcoin Gains Despite Bearish Signals

CryptoQuant’s March 11 market report highlighted that Bitcoin’s Bull-Bear Market Cycle Indicator has reached its most bearish level of the current cycle. Additionally, Bitcoin’s MVRV Ratio Z-score, a metric used to assess whether Bitcoin is overvalued or undervalued, has crossed below its 365-day moving average. This move suggests that the recent uptrend is losing momentum.

Despite these indicators, Bitcoin is trading at $82,910 at the time of publication, rebounding from a 24-hour low of $79,356, according to CoinMarketCap data. The price rally followed a period of market instability, with Bitcoin previously experiencing a sharp decline amid economic uncertainty in the U.S.

Political and Economic Factors at Play

Much of Bitcoin’s recent gain coincided with news that U.S. Senator Cynthia Lummis reintroduced the BITCOIN Act, a proposal urging the U.S. government to acquire 1 million BTC over the next five years. This announcement provided a temporary boost to investor sentiment, despite concerns surrounding broader economic conditions.

The U.S. market also steadied on March 11 after experiencing turbulence a day earlier. Market jitters followed comments from former President Donald Trump, who refused to rule out the possibility of a recession. These uncertainties have contributed to increased volatility in the crypto market.

Analysts Remain Divided on Market Direction

While Bitcoin’s price surge has sparked optimism among some traders, others remain skeptical about its sustainability. Crypto analyst Bitcoin Rachy questioned the rally, calling it a “fake pump” in a post on X (formerly Twitter). Similarly, trader BitcoinHyper warned, “Every pump feels like the beginning. This is how the market takes your money.”

Adding to concerns, CryptoQuant reported that Bitcoin demand in the U.S. declined by 103,000 BTC last week compared to the previous week. This marks the fastest pace of demand contraction since July 2024. The report attributed the decline to ongoing uncertainty over U.S. inflation rates and economic policies.

Federal Reserve Chair Jerome Powell has reiterated that he is in no rush to adjust interest rates, further contributing to investor hesitation. Meanwhile, President Trump’s tariffs imposed on February 1 have added another layer of economic instability, prompting cautious behavior among institutional investors.

Support Levels and Future Outlook

With Bitcoin still down 14% over the past month, CryptoQuant suggests that the recent drawdown is not unusual when compared to past bull market corrections. However, analysts warn that if Bitcoin fails to hold its current support level between $75,000 and $78,000, it could face a steeper decline, potentially dropping to $63,000—a level not seen since October 2024.

Despite these risks, some experts remain optimistic. Swan Bitcoin CEO Cory Klippsten told Cointelegraph that there is a “more than 50% chance we will see all-time highs before the end of June this year.” Bitcoin’s current all-time high stands at $109,000, reached on January 20.

Conclusion

Bitcoin’s recent price action highlights the ongoing tug-of-war between bullish optimism and bearish macroeconomic conditions. While the 7% rally signals resilience, bearish indicators, and declining demand raise questions about the sustainability of the uptrend. Investors will be closely watching key support levels and broader economic developments to determine whether Bitcoin can maintain its momentum or face another significant correction.