Bitcoin Enters Early Stage of New Bull Cycle, But Faces Key Resistance
CryptoQuant, a renowned analytics firm in the crypto space, believes that Bitcoin (BTC) may be entering a new bull cycle. According to their research note published on August 25, several valuation, demand, and liquidity indicators have turned higher, signaling a potential shift in market sentiment.
The assessment comes as BTC has shown renewed price strength, climbing about 24% from August 17 and reaching $80,000, its highest level since mid-May. This rally is attributed to various factors, including the US Treasury's plans to raise long-term bond buybacks and President Donald Trump's comments on possible federal Bitcoin purchases.
CryptoQuant's Bull Score has risen significantly, from 30 to 80 during the week, with eight out of ten underlying indicators now in bullish territory. The firm also observed a sharp improvement in demand conditions, with apparent spot demand expanding at its fastest monthly pace since late December.
However, CryptoQuant emphasized that Bitcoin needs a daily close above its 365-day moving average for confirmation, which currently stands near $83,000. Despite the bullish signals, the report also identified factors that could create short-term pressure on Bitcoin's price, including trader unrealized profit margins reaching 20.5% and large holders realizing record profits.
The data suggests that some holders are preparing to sell, as higher Bitcoin, Ether, and XRP deposits were observed on exchanges, which can signal profit-taking if prices struggle above key resistance levels.