Analysts at the crypto research firm CryptoQuant suggest that bitcoin has exited its bear market and entered the early stage of a new bull cycle, driven by improving spot demand and institutional exchange-traded fund buying rather than excessive leverage.
CryptoQuant founder Ki Young Ju shared on X on Tuesday that the asset has entered an early bull phase, pointing to historical market movements similar to those seen prior to previous bull markets. Research from the firm indicates that derivative exchange flows have resumed, signaling that traders have shifted into a risk-on mode.
Another analyst at the firm, Theophiluspep, noted that spot demand, ETF flows, and market momentum have turned bullish. However, the analyst also highlighted that elevated profit-taking, exchange inflows, and overbought conditions could lead to a near-term cooldown.
Bitcoin began surging last week, rising 22% over a seven-day period. The cryptocurrency was recently priced at $78,716, after briefly touching $81,160 on Monday. This upward movement follows a sluggish June and July, during which the asset mostly traded below $65,000.
The recent price surge coincides with a shift in sentiment among U.S. investors, who reversed course to buy shares in bitcoin exchange-traded funds. According to Farside Investors data, funds managed by firms such as BlackRock, Fidelity, Grayscale, and Morgan Stanley brought in $1.9 billion in new cash, marking their best week since October.
Market sentiment was further bolstered by the U.S. Treasury Department's announcement last week to at least double the size of its long-dated bond buybacks. Following the announcement, Treasury yields declined, the dollar hit a three-month low, and both bitcoin and gold increased in value. Additionally, positive regulatory developments included a meeting between President Donald Trump and crypto executives, during which he urged lawmakers to advance the Clarity Act.
