Bitcoin drops below $60k again! Another bearish week ahead?

• BTC is up 9.92% over the past seven days, but has fallen again at press time.
• Despite the upswing, BTC remains in a bearish market especially with declining trading volume.

Bitcoin last week [BTC] Temporarily made a recovery back to the $60k level

Since hitting local lows a week ago, Bitcoin tried to maintain an upward momentum, but failed as it fell back below $60k. On the contrary, analysts are talking about the prevailing market situation.

Popular crypto analyst Ali Martinez suggests that a trend reversal isn't complete, citing Bitcoin's trading volume.

Prevailing market sentiment

In his analysis, Martinez noted declining trading volumes that suggest a trend reversal has not occurred.

Source: X

According to this analysis, during an uptrend, BTC transaction volume increases and decreases during a downtrend. Thus, since, the current situation sees a decrease in trading volume, the market is still in a downtrend.

In context, during rising prices, trading volume increases as more investors actively buy and sell resulting in higher market activity.

Thus, an increase in volume usually confirms the strength of an uptrend, as more investors are actively engaged in the market.

Subsequently, when the market goes down, the volume decreases. Low volume suggests low market participation. This indicates that bearish market sentiment is still in play.

As Martinez notes, Bitcoin's trading volume has fallen by 58.66% over the past day. Therefore, based on this analysis, BTC is still in a bearish market.

What does the BTC chart suggest?

As Martinez points out, even though BTC has tried to pull out, bears are still dominating the market. Therefore, current market conditions could set Bitcoin up for a fall.

Source: Cryptoquant

For example, Bitcoin's fund flow ratio has declined over the past week. This implies that there is less buying activity than selling which means very few investors are injecting their funds into the market.

This is a bearish market sentiment as investors are closing their positions contributing to downward price pressure.

Source: Cryptoquant

Additionally, Bitcoin's net realized gain/loss has decreased over the past 2 days compared to the previous day. NRPL's decline suggests investors are selling at a loss.

Source: Sandhi

This suggests that demand for BTC has decreased because fewer buyers are willing to purchase at higher prices or there is less trading activity.

Finally, the Bitcoin price DAA divergence over the past week remains. A negative DAA deviation means that the price of Bitcoin is increasing while daily active addresses are decreasing.

Read Bitcoin [BTC] Price Forecast 2024-2025

This suggests that while prices are rising, the fundamental use of the network is not catching up. It is bearish as the price rise is a purely speculative rally.

Simply put, Martinez notes, Bitcoin is still in a bearish trend. Thus, if this negative market sentiment holds, BTC risks a fall to $57342.