Bitcoin Surges 7% Despite Bearish Signals, Legislation Boosts Price

Bitcoin's price surged by 7% within a 24-hour period, reaching a high of $82,910 from a low of $79,356. This significant increase occurred despite various metrics indicating a bearish outlook for the cryptocurrency market. The surge highlights the volatile nature of Bitcoin, which can experience substantial price fluctuations within short periods. This event underscores the importance of monitoring market indicators and understanding the underlying factors that drive price movements in the cryptocurrency space. Investors and traders should remain vigilant and adapt their strategies accordingly to navigate the unpredictable landscape of digital assets.

According to onchain analytics platform CryptoQuant, all Bitcoin valuation metrics indicate that the market is in bearish territory. The Bitcoin Bull-Bear Market Cycle Indicator is at its most bearish level of this cycle, and the MVRV Ratio Z-score has crossed the 365-day moving average, indicating that the upward price trend has lost momentum. Despite these bearish signals, Bitcoin's price has shown resilience, suggesting that there may be underlying factors driving the recent surge.

One potential factor contributing to Bitcoin's price increase is the reintroduction of the BITCOIN Act by Senator Cynthia Lummis. The proposed legislation aims to have the US government buy 1 million BTC over five years, which could potentially increase demand for Bitcoin and drive up its price. However, some traders remain skeptical about the sustainability of the recent price increase, with some suggesting that it may be a "fake pump" designed to lure in unsuspecting investors.

CryptoQuant also noted that Bitcoin's demand fell by 103,000 BTC last week compared to the previous week, marking its fastest pace of contraction since July 2024. The decline in demand is attributed to uncertainty around inflation rates and imposed tariffs, as well as the Federal Reserve's reluctance to adjust interest rates. Additionally, whales have slowed down their Bitcoin accumulation, and spot ETFs in the US have turned into net sellers of Bitcoin, further contributing to the bearish outlook.

Despite the recent price increase, Bitcoin is still down 14% over the past month. CryptoQuant warns that if Bitcoin breaks its current support at the $75,000 to $78,000 price level, its next target could be as low as $63,000, a level not seen since