Bitcoin’s recent market rally has cooled, with prices dropping nearly 4% over a seven-day period to $82,939 after touching an eight-month high of $87,251, according to data analytics firm CryptoQuant. Despite the slower momentum, analysts at the firm report that the cryptocurrency remains firmly inside a bull market cycle, driven by key technical thresholds and renewed macroeconomic demand.
CryptoQuant Declares Bull Market After Moving Average Crossover
The recent surge prompted CryptoQuant to officially declare the start of a bull market after the leading cryptocurrency crossed above its 365-day moving average. According to data analytics firm CryptoQuant, this milestone acts as the definitive technical signal that has historically marked the beginning of Bitcoin bull cycles in past years.
However, short-term traders holding coins for durations of one to three months are currently sitting on an average unrealized profit of roughly 33%, marking the highest profit margins seen since December 2024. These elevated margins have historically tempted participants to liquidate holdings, leading to heavy profit-taking across the network.
Record Profit-Taking and Downside Support Levels
Holders realized 25,700 BTC in profit last week, representing the single largest profit-realization day of 2026, which occurred just one day after prices hit the eight-month peak. While CryptoQuant notes that Bitcoin still retains room to run higher, the rally has undeniably lost steam, making a near-term price correction increasingly likely.
The analytics firm outlined three distinct downside support levels where any upcoming correction could establish a floor:
- 365-day moving average: Approximately $80,000
- 200-day moving average: Approximately $71,000
- Traders’ on-chain realized price: Approximately $67,000
As long as these critical price thresholds hold firm, CryptoQuant characterizes the current pullback as a healthy consolidation phase within a young bull market rather than a definitive trend reversal.
Macro Factors and the Return of the Debasement Trade
Market dynamics shift against the backdrop of broader economic trends. Bitcoin previously reached a record of $126,080 in October of last year before plunging sharply later that month during a historic liquidation event that wiped out over $19 billion in bets. Downward pressure continued through the first half of this year as the Federal Reserve signaled no immediate plans to lower interest rates, prompting investors to direct capital toward artificial intelligence equities instead.
Sentiment has shifted back toward digital assets due to the debasement trade—a strategy where investors purchase alternative assets to hedge against fiat currency depreciation. This trade gained fresh momentum after total U.S. national debt surpassed $40 trillion for the first time in July, reviving historical trends where Bitcoin and precious metals like gold outperform during periods of a weakening U.S. dollar.
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