Bitcoin (BTC) tapped $83,700 during early Asian time hours on March 12 after reaching a minimum of $76,600 on March 11 amid a slight improvement in market sentiment.
BTC/USD is facing a denial from the $84,000 level, raising questions about whether BTC prices could drop even further in the coming days.
BTC/USD Hourly Chart. Source: Cointelegraph/TradingView
Bitcoin demand remains weak
The Spot Bitcoin Exchange-Traded Funds (ETF) spill has played a major role in the first BTC price drop since late February, exceeding $1.5 billion in the past two weeks.
Related: Why is Bitcoin increasing prices today?
Meanwhile, obvious demand for Bitcoin remains low, meaning reduced risk appetite from potential investors, according to data from market intelligence firm Cryptoquant.
What I Know:
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The obvious demand is the difference between production and inventory changes.
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Production refers to the issuance of BTC mining, and inventory refers to inactive supply for more than one year.
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As production exceeds inventory cuts, apparent demand weakens.
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After an acceleration period passed between November 2024 and December 2024, and supported by President Donald Trump's victory, apparent demand for Bitcoin fell to 10,000 on February 26th to 279,000 BTC on December 4th.
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On February 27th, the metric tested negative for the first time since September 2024.
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Currently at -93,700 BTC at the time of writing.
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If the trend continues, prices could fall, as happened in July 2024.
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The chart below shows that apparent demand for Bitcoin was at a similar level on July 27, 2024, then BTC prices fell another 30% to $49,000 on August 5, 2024.
Apparent demand for Bitcoin. Source: Cryptoquant
However, this metric does not always guarantee a more downside in the future. For example, in late May 2024 and late October 2024, prices were negative before 7% and 73% respectively rose respectively.
Bitcoin metrics suggest a deeper correction
Data from Cointelegraph Markets Pro and TradingView show Bitcoin prices trading 7% above the four-month low of $76,600 that reached March 12th.
Despite this rebound, according to Cryptoquant, some metrics are still leaning badly, suggesting that deeper corrections are possible.
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The Bitcoin Bree Bear Market Cycle Indicator is at the “most bearish level” of this cycle.
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The Bull/Bear Market Cycle Indicator is a momentum metric that measures the difference between the P&L index and its 365-day moving average.
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Values above 0 indicate BTC is in the bull market, while values below 0 indicate bear market.
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The current value of -0.067 is the lowest level since May 2023, when Bitcoin prices began to take a sustained recovery.
Bitcoin: Bullbear Market Cycle Indicator. Source: Cryptoquant
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Meanwhile, the MVRV ratio Z score exceeds the 365-day moving average, indicating that the trend in rising prices is losing momentum.
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The MVRV ratio Z score is an important metric used to assess whether Bitcoin is overvalued or undervalued.
“Historically, metrics at these levels have either shown sharp revisions or the start of the bear market.”
Bitcoin Price Bear Flag is a hint for $68,400
From a technical standpoint, BTC prices are trading within a bearish continuation pattern that indicates potential revisions in the future.
Key Points:
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BTC is traded within the bear flag pattern, indicating a more downside potential if the main support level is not maintained.
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The bear flag that occurred after Bitcoin fell from $92,000 to a local low of $76,600 between March 6th and 11th.
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Integration within the bare flag is doing BTC trading on ascending parallel channels, and in today's drop tests there is a significant support level in which the flag's lower boundary includes $82,000.
BTC/USD 4-hour chart. Source: Cointelegraph/TradingView
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This level of breakdown can cause another price crash.
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The downside target for the bare flag, derived from the height of the previous drop, is around $68,400, representing a 17% drop from the current price.
Meanwhile, Cryptoquant analysts say Bitcoin could be even lower if the current support zone is not held between $75,000 and $78,000.
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
