On-Chain Clues Suggest Bitcoin Bounce Might Be a False Signal—Here’s What to Know

Bitcoin has shown signs of stabilization after falling to $74,000 earlier this month, rebounding nearly 10% to trade above $84,000. This upward movement has reignited optimism among investors, but some analysts remain cautious about calling it a definitive trend reversal. On-chain data suggests that the current recovery may be linked to improving demand indicators, particularly the Apparent Demand metric, which has started to rebound from negative territory. However, analysts warn against assuming this is the start of a new bullish cycle, drawing parallels to Bitcoin's behavior during the 2021 cycle. During that period, demand remained suppressed for an extended timeframe, even as prices temporarily recovered. Only after a long consolidation phase did the market experience a genuine structural shift. Another market signal worth watching comes from Binance, where inflows of Bitcoin from short-term holders have been steadily decreasing, suggesting a decline in immediate selling pressure. The data indicates that average realized prices for short-term holders currently hover around $92,800, meaning many recent sellers have exited at a loss. The decline in selling pressure could provide some support for Bitcoin's current price levels, but confirmation of accumulation or a broader bullish phase remains elusive. Analysts emphasize the need for continued monitoring to determine if this reduction in selling pressure persists.