Bitcoin indicator turns green: Bear trap or bullish signal?

The Bitcoin bull-bear market cycle indicator has shifted to a bullish signal once again, following a brief bearish period triggered by Bitcoin’s dip below $50,000. This recent flip to green comes after the indicator had flashed red for three days as Bitcoin’s price tumbled to its lowest levels since February.

According to CryptoQuant founder and CEO Ki Young Ju, most Bitcoin on-chain cyclical indicators that were previously near the borderline have now shifted back to signaling a bull market.

What is the key to Bitcoin’s next bull run?

Ki Young Ju recently posted on X that as long as the value of Bitcoin stays above $45,000, it could potentially hit a new record high within the next year. He pointed out that although some market trends are currently indicating a downward trend, there’s still a chance for a comeback if Bitcoin stays at this price for the next few days. 

Ju warned that if Bitcoin stays at or below this level for a long time, the chances of moving into a bear market go up. He highlighted that recovering from this situation could be especially difficult if the decline continues for over a month.

As long as the #Bitcoin price stays above $45K, it could break its all-time high again within a year, imo.

Some indicators are showing bearish signals. However, they could still recover with a rebound, so we need to watch if it stays at this level for a week or two.

If it… https://t.co/FnqafcQcjp pic.twitter.com/fJiM2btQeF

— Ki Young Ju (@ki_young_ju) August 6, 2024

Bitcoin recovers from ‘Crypto Black Monday’

CryptoQuant indicates that Bitcoin was considered discounted for just three days, with a notable drop to $49,751 on August 5, dubbed ‘Crypto Black Monday’—the first time Bitcoin had fallen below $50,000 since February.

Bitcoin traded below the critical $60,000 mark until August 8, according to CoinMarketCap. As of now, Bitcoin is priced at $60,726.

According to CryptoQuant, the Bitcoin bull-bear market cycle indicator had not flashed a bear signal since January 2023. The crypto fear and greed index reached an ‘Extreme Fear’ score of 17 on August 6, the lowest since the FTX crash. However, it has since recovered to a ‘Neutral’ score of 48.

Some traders view the rapid turnaround as indicative of a potential bear trap—where experienced traders sell Bitcoin strategically to drive down prices and trap short-sellers temporarily.

Opinions are divided on the market’s next direction. Markus Thielen, head of research at 10x Research, suggested that the ideal entry point for the next bull market would be Bitcoin prices falling into the low $40,000s.

In contrast, Ark Invest, led by Cathie Wood, identified critical price supports at $52,000 and $46,000 in their August 6 report. Veteran trader Peter Brandt observed that Bitcoin’s recent decline resembles the 2015-2017 halving bull market cycle, potentially signaling an upcoming bull run.