The price trend of Bitcoin is not without clues. Through on-chain data analysis, we can trace the potential reasons and phase characteristics behind its decline.
Signs of Reversal: Divergence in Demand Indicators
In the first phase, Bitcoin's price climbed to $118,000, with demand indicators rising in sync, leading the market to believe that the upward momentum would continue. At that time, the price aligned with demand, confusing many investors.
In the second phase, Bitcoin reached a historic high of $126,000, and demand indicators also peaked. This consistency further reinforced traders' and stakeholders' confidence in Bitcoin.
Five Stages of Decline
In the third phase, signs of divergence began to appear. Demand indicators fell below previous highs, retreating to $123,000. Although Bitcoin's price remained high, on-chain data showed that the upward momentum had started to weaken.
In the fourth phase, Bitcoin dropped to $114,000, with the demand side showing a clear bearish framework—indicators exhibited lower highs and lower lows—strongly suggesting that the upward trend had reversed, even though the price remained above $110,000.
In the fifth phase, the downward trend continued, with the price sliding to $101,000. On the demand side, each lower high hinted at a gradual price decline.
Critical Moment: Breaking Below the Moving Average
The final stage of analysis occurred on November 16, when Bitcoin fell to $94,000, breaking below the 50-day simple moving average. Both price and demand indicators declined, and according to CryptoQuant's analysis, this was a clear signal for strategic adjustments.
A spokesperson from CryptoQuant stated, “Each stage of the decline provides investors with a unique perspective to reassess their risk exposure.”
Current Market Signals
Currently, demand growth indicators continue to decline, approaching the lower limit of their range. Market participants are closely monitoring this position to determine whether it signals another accumulation phase similar to the one before the 2025 rally, or if it indicates a structurally weak outlook. CryptoQuant's in-depth analysis reveals the complex dynamics of Bitcoin, emphasizing the importance of using on-chain data to predict and navigate market changes.