CryptoQuant: Weak Market Demand Indicates Current Rebound is Merely a Bear Market Rally, Bitcoin Price Action Resembles 2022 High

On-chain analytics firm CryptoQuant noted on January 17 that Bitcoin’s recent price rebound looks more like a short-lived bounce than a sustained recovery, as market demand remains weak. In its Friday report, CryptoQuant stated: “Bitcoin has risen 21% since November 21—this seems to be a bear market bounce. Demand has improved slightly but still looks weak.” A bear market bounce is a sharp price recovery within an overall downtrend that doesn’t change the fundamental bearish structure. Research director Julio Moreno said the rebound is still backed by shrinking demand trends. After previously dropping ~19% and falling below its 365-day moving average, Bitcoin has climbed ~21% since November 21. CryptoQuant views this moving average as a key line between bull and bear markets—once Bitcoin drops below it, a bear market is confirmed. Analysts note the current trend mirrors 2022’s: back then, Bitcoin also saw a strong bounce after breaking below the 365-day average, only to be blocked near it and resume its decline. Per CryptoQuant data, Bitcoin is again approaching this long-term average (currently ~$101k) but hasn’t reclaimed it yet. The firm said past bear markets saw similar failures to reclaim this average trigger new sell-offs. “At the time, many thought the bear market was over, the four-year cycle was broken, and a supercycle was imminent—sentiment that’s quite similar to today’s,” CryptoQuant wrote. “Yet fundamentals and technical indicators still show we’re in a bear market.”