Bitcoin Ongoing Recovery: a Bull Trap or Breakout? Market Index Reveals Crucial Clues

Samuel Edyme

2 months ago

3 mins read

Bitcoin Ongoing Recovery: a Bull Trap or Breakout? Market Index Reveals Crucial Clues

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Bitcoin has maintained its upward trajectory so far this week, with the asset reclaiming and holding above the $85,000 mark. This performance reflects a weekly gain of approximately 4.7%, indicating a possible shift in momentum after weeks of sideways and bearish activity.

While short-term gains have been recorded, signs that might determine Bitcoin’s next major move appear to have emerged. Particularly, a renewed analysis of market health and investor behavior has accompanied the current price action of BTC.

On-chain metrics and sentiment indicators are being used to assess whether the current recovery signals a continuation of the bull cycle or if the market may be transitioning into a new phase.

One such framework recently shared by CryptoQuant contributor Woominkyu offers a broader view of Bitcoin’s positioning using the Bitcoin Combined Market Index (BCMI).

Assessing Market Health Through BCMI Metrics

According to Woominkyu, the BCMI provides a comprehensive overview of Bitcoin’s market condition by aggregating four core metrics: MVRV (30%), NUPL (25%), SOPR (25%), and the Fear & Greed Index (20%).

Bitcoin Combined Market Index (BCMI). | Source: CryptoQuant

Each component reflects key aspects of network valuation, investor sentiment, realized gains/losses, and emotional market trends. The index assigns weightings to each metric and calculates a combined score, which can indicate whether the market is overheated or undervalued.

Historically, a BCMI score below 0.15 is associated with extreme fear and potential buying opportunities, while scores above 0.75 often precede market tops or sharp corrections.

At present, the BCMI remains below the 0.5 level, suggesting that Bitcoin has not yet entered the overheated zone. Woominkyu suggests two possible scenarios: the market is either undergoing a normal correction within an ongoing bull cycle, or it is showing early signs of an atypical transition into a bearish phase.

The moment of decision for Bitcoin

“During this current market cycle, BCMI hasn’t yet reached the typical ‘overheated’ zone (above 0.75). It’s currently hovering below 0.5, suggesting we’re at a crucial market juncture.” – By @Woo_Minkyu

Read more ⤵️https://t.co/sfyunRuWbh pic.twitter.com/he77VS98t7

— CryptoQuant.com (@cryptoquant_com) March 26, 2025

Key Thresholds to Watch in Bitcoin

The analyst points to the importance of monitoring the 7-day and 90-day moving averages of the BCMI for clearer direction.

Should the index begin to trend upward, it may signal renewed momentum and a potential return to higher price levels. Conversely, a sustained decline could confirm a broader trend reversal. Meanwhile, IntoTheBlock has recently shared resistance zones of BTC identified onchain.

The market intelligence platform particularly emphasizes the $97.400 level noting that this is “where roughly 1.44 million BTC are currently holding at a loss,” therefore should BTC price hit that point we could see a pullback.

Is Bitcoin on its way to test its highs?

The red bubbles in this chart highlight levels where underwater investors could sell as they break even, especially if uncertainty persists.

A key zone is around $97.4k, where roughly 1.44 million BTC are currently holding at a loss. pic.twitter.com/LKaDBen7cU

— IntoTheBlock (@intotheblock) March 24, 2025

Featured image created with DALL-E, Chart from TradingViiew

Samuel Edyme

Meet Samuel Edyme, Nickname - HIM-buktu. A web3 content writer, journalist, and aspiring trader, Edyme is as versatile as they come. With a knack for words and a nose for trends, he has penned pieces for numerous industry player, including AMBCrypto, Blockchain.News, and Blockchain Reporter, among others.

Edyme’s foray into the crypto universe is nothing short of cinematic. His journey began not with a triumphant investment, but with a scam. Yes, a Ponzi scheme that used crypto as payment roped him in. Rather than retreating, he emerged wiser and more determined, channeling his experience into over three years of insightful market analysis.

Before becoming the voice of reason in the crypto space, Edyme was the quintessential crypto degen. He aped into anything that promised a quick buck, anything ape-able, learning the ropes the hard way. These hands-on experience through major market events—like the Terra Luna crash, the wave of bankruptcies in crypto firms, the notorious FTX collapse, and even CZ’s arrest—has honed his keen sense of market dynamics.

When he isn’t crafting engaging crypto content, you’ll find Edyme backtesting charts, studying both forex and synthetic indices. His dedication to mastering the art of trading is as relentless as his pursuit of the next big story. Away from his screens, he can be found in the gym, airpods in, working out and listening to his favorite artist, NF. Or maybe he’s catching some Z’s or scrolling through Elon Musk’s very own X platform—(oops, another screen activity, my bad…)

Well, being an introvert, Edyme thrives in the digital realm, preferring online interaction over offline encounters—(don’t judge, that’s just how he is built). His determination is quite unwavering to be honest, and he embodies the philosophy of continuous improvement, or “kaizen,” striving to be 1% better every day. His mantras, “God knows best” and “Everything is still on track,” reflect his resilient outlook and how he lives his life.

In a nutshell, Samuel Edyme was born efficient, driven by ambition, and perhaps a touch fierce. He’s neither artistic nor unrealistic, and certainly not chauvinistic. Think of him as Bruce Willis in a train wreck—unflappable. Edyme is like trading in your car for a jet—bold. He’s the guy who’d ask his boss for a pay cut just to prove a point—(uhhh…). He is like watching your kid take his first steps. Imagine Bill Gates struggling with rent—okay, maybe that’s a stretch, but you get the idea, yeah. Unbelievable? Yes. Inconceivable? Perhaps.

Edyme sees himself as a fairly reasonable guy, albeit a bit stubborn. Normal to you is not to him. He is not the one to take the easy road, and why would he? That’s just not the way he roll. He has these favorite lyrics from NF’s “Clouds” that resonate deeply with him: “What you think's probably unfeasible, I've done already a hundredfold.”

PS—Edyme is HIM. HIM-buktu. Him-mulation. Him-Kardashian. Himon and Pumba. He even had his DNA tested, and guess what? He’s 100% Him-alayan. Screw it, he ate the opp.

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