Warning Signs Emerge: Analysts Say Bitcoin’s Recent Rise May Have Been a Mirage

After showing signs of recovery last week, Bitcoin appears to have lost its upward momentum once again. The cryptocurrency was closing in on the $90,000 psychological level but has since reversed direction, falling by 6.4% over the past week to hover around $82,000 at the time of writing.

This decline has placed renewed attention on market metrics that suggest the rally may have been short-lived. Amid this downward movement, several on-chain analysts have raised questions about whether recent price trends reflect real demand or speculative behavior.

Particularly, insights from CryptoQuant contributors point to warning signs, including a divergence between market capitalization and actual network activity.

NVT Indicator Signals Caution Amid Low Transaction Volume

In a recent post titled “Manipulative Moves or True Value? A Bitcoin and NVT Analysis,” CryptoQuant analyst BorisVest pointed to the Network Value to Transactions (NVT) ratio as a critical metric for understanding current market dynamics.

The NVT ratio is calculated by dividing Bitcoin’s market capitalization by its daily transaction volume. According to BorisVest, Bitcoin’s elevated NVT Golden Cross reading indicates a high market cap against low transaction activity — a combination that historically suggests price inflation driven by speculative interest rather than organic growth.

BorisVest emphasized that periods with a high NVT often precede market corrections. In contrast, when the NVT falls into the green zone — signaling a low market cap with rising transaction volume — it may present a stronger foundation for price appreciation.

As of now, the metric suggests Bitcoin’s recent price rise lacks transactional support, and continued pullbacks remain possible unless volume returns to the network.

Bitcoin Speculators Absent, Sentiment Remains Cautious

Adding to the cautious outlook, another CryptoQuant contributor known as crypto sunmoon highlighted the role of leverage in driving crypto bull markets.

The analyst pointed out that funding rates have recently “dead-crossed,” which occurs when short-term funding rates fall below long-term rates, often indicating bearish sentiment among traders.

According to sunmoon, this shift suggests that speculators are currently unwilling to take on risk — a key component needed to fuel bullish price movements.

The analyst concluded that the return of speculative trading behavior, typically marked by rising funding rates and leveraged positions, is essential for reigniting upward momentum in Bitcoin.

Until then, market sentiment may remain subdued, with sideways or declining price action more likely. According to these CryptoQuant analysts, watching Bitcoin’s transaction volumes and funding trends will be crucial in determining whether Bitcoin is set for a renewed breakout or further consolidation.

Featured image created with DALL-E, Chart from TradingView