CryptoQuant: Spot Market Led Bitcoin’s Rise, Expect Trend Reversal

• A prominent researcher said the bullish Bitcoin trend was from the Spot market.
• Wenry believes it is not the right time to enter the market as there would be a retrace.
• BTC trades at $23,699, with about a 4% increase in the last seven days.

According to Wenry, a crypto analyst at CryptoQuant, a data analytic firm, the current bullish price of Bitcoin (BTC) is driven by transaction volumes on the spot market, while futures contracts caused declines.

Wenry noted that BTC’s perpetual swap product, otherwise called futures contract, has 20% more sell orders than buy and that Binance’s market trading data confirmed that the inflow of funds after Bitcoin touched $23k decreased.

Commenting on the upcoming market trend, the analyst said that the current strong buying trend would continue based on technical indicators. However, trading volumes are declining, and the indicator has reached a critical point for overbuying.

Wenry believes that now is not the right time to enter the market as there would be a retrace any time soon. In his words:

It will be more efficient for risk management to respond with a focus on profit realization rather than new purchases, and it is better to consider a new entry in the event of a fall from $19800 to $20600.

According to the crypto market tracking platform, CoinMarketCap, BTC trades at $23,699, with about a 4% increase in the last seven days. Similarly, Ethereum trades at $1,633 with no significant movement in the past week.

Of the top 20 cryptocurrencies with the most significant market cap, only two coins have made substantial price movements over the previous seven days. These are Avalanche (AVAX) and Polygon (MATIC), which both grew by over 15%.

Generally, the crypto market has been passive since the past week after the relief rally that saw the global crypto market cap breaking the $1 trillion point value.