Bitcoin has made a comeback over the past week, rising by 5%. Although investors continue to proceed with caution, new data revealed that bullish sentiment is at its strongest level in six weeks.

This shift came as the crypto asset soared to $88,500 where its rally was stopped.

Bullish Sentiment

According to the latest analysis shared by Santiment, the week started on a positive note for the crypto market, with Bitcoin reaching $88,500 for the first time in 17 days. Ethereum also saw a surge as it surpassed $2,100 for the first time in 14 days.

According to the data revealed by the on-chain analytic platform, positive social media comments have been on the rise, which indicates increased optimism among market participants.

Interestingly, Bitcoins crowd sentiment has hit its highest level since February 14, while Ethereums sentiment is also trending bullish, thereby suggesting that the recent rally may continue as investor confidence grows.

Cyclical On-Chain Metrics

Despite the price appreciation, the Bitcoin IFP (Inflow-Flow Position) metric continues to flash bearish signals. With an IFP of 696k, significantly below the 90-day simple moving average (SMA90) of 794K, this metric suggests no imminent trend reversal to the upside.

Additionally, the Bitcoin CQ Bull Bear Market Cycle Indicator remains bearish. Although BTC is in an uptrend, the indicator has shown weak bearish signals similar to previous downturns. The crucial question remains whether this is just a natural market correction or the start of a deeper bear phase. As the DMA30 is still below the DMA365, no bullish shift can be confirmed based on this indicator alone.

Meanwhile, the Bitcoin MVRV (Market-Value-to-Realized-Value) score is currently below its 365-day moving average (SMA365). Historically, this has signaled increased selling pressure, as seen during the August 2024 carry trade crisis when the MVRV score briefly dipped below SMA365. Once that crisis subsided, the MVRV reclaimed the SMA365, which hinted at recovery.

Finally, the NUPL (Net Unrealized Profit/Loss) metric is still below its SMA365 level, which shows that the uptrend could be losing momentum. For Bitcoin to regain strength, the NUPL would need to cross back above its SMA365.

While these metrics suggest a period of short-to-mid-term turbulence, none indicate that Bitcoin has reached an overheated cycle top. Drawing comparisons to the carry trade crisis of August 2024, CryptoQuant analysis suggests that the current bearish signals could be linked to macroeconomic conditions, which are similar to last years market conditions. Once these macro pressures ease, Bitcoin is expected to recover, but the market must wait and see if history repeats itself.