As Bitcoin experiences a gradual price recovery, recent analysis sheds lithe on the broader market attitude of the cryptocurrency.

A CryptoQuant analyst known as “Crazzyblockk” recently shared detailed information test on Bitcoin’s quarterly performance, focusing on key metrics such as asset market capitalization and realized capitalization.

According to the analyst, checking these indicators every quarter can provide valuable information about long-term trends and potential future price movements.

Current market signals are reminiscent of the 2021 boom

The analysis highlights how fluctuations in Bitcoin’s market cap and realized capitalization signal bullish and bearish trends over time. Market capitalization refers to the total value of all BTC in circulation, while realized capitalization measures value based on the price at which each Bitcoin last moved.

Historically, when market cap increases faster than realized cap, it often signals the beginning of selling pressure, leading to a bear market. Conversely, when market capitalization falls while realized capitalization remains constant or increases, Bitcoin tends to find the lowest price, indicating potential buying opportunities.

Crazzyblockk’s analysis aligns with the current market situation and Bitcoin’s behavior during the 2021 boom. During this period, the rapid escalate in market capitalization led to significant selling pressure, ultimately causing a price correction.

According to the analyst, Bitcoin is currently in a similar situation. While market capitalization has seen significant growth, realized capitalization continues to rise, indicating the possibility of another major price correction on the horizon.

The analyst’s research also indicates that sustained growth in realized capitalization, without adequate support from market capitalization, tends to trigger corrections as investors realize their profits.

This phenomenon is particularly significant in the current market environment, where the price of Bitcoin has increased in recent months, but maintaining its upward trajectory faces challenges. Crazzyblockk warns that a correction may be inevitable if Bitcoin’s market capitalization is unable to maintain its current levels.

Bitcoin Market Performance

Meanwhile, Bitcoin appears to be seeing a slowdown in the positive price performance previously seen in recent weeks. So far, the asset’s value has increased by almost 10% in the last 14 days, rebounding from major highs and even approaching the price of $70,000, with the high price of $69,227 recorded yesterday.

However, Bitcoin’s performance over the last day suggests a slowdown in price growth. During this period, Bitcoin fell below $67,000, with its current trading price of $66,980.

Regardless of this price correction, some analysts remain positive. In particular, this was recently highlighted by a renowned crypto analyst known as Mustache on X post that “Bitcoin has broken out of a declining channel that has been going on for over 7 months.”

The analyst added that this price action is “reminiscent” of 2020 before the rally. Commenting on BTC’s ongoing decline, the analyst stated: “Are bears celebrating a retest? They will soon be surprised.

Featured image created with DALL-E, chart from TradingView