Bitcoin has made a comeback over the past week, rising 5% in price. While investors remain cautious, new data has shown that bullish sentiment has reached its strongest level in six weeks.

According to the latest analysis provided by Santiment, the week started on a positive note for the cryptocurrency market, with Bitcoin hitting $88,500 for the first time in 17 days. Ethereum has also shown gains, surpassing $2,100 for the first time in 14 days.

According to data provided by the network’s analytics platform, the number of positive comments on social media is increasing, indicating growing optimism among market participants.

Interestingly, Bitcoin general sentiment has reached its highest level since February 14, while Ethereum sentiment is also trending higher, suggesting that the recent gains could continue as investor confidence grows.

Despite the price increase, Bitcoin’s IFP (Inflow-Flow Position) metric continues to give bearish signals. With the IFP at 696k, well below the 90-day simple moving average (SMA90) of 794k, this metric does not suggest a reversal to the upside anytime soon.

Also, the Bitcoin CQ Bull & Bear Market Cycle Indicator remains bearish. Although BTC is in an uptrend, the indicator shows weak bearish signals similar to previous declines. The key question remains whether this is just a natural market correction or the beginning of a deeper bearish phase. With the DMA30 still below the DMA365, a bullish shift cannot be confirmed based on this indicator alone.

Meanwhile, Bitcoin’s MVRV (Market Value to Realized Value) valuation is currently below its 365-day moving average (SMA365). Historically, this has signaled an increase in selling pressure, as was the case during the carry trade crisis of August 2024, when the MVRV valuation briefly dipped below the SMA365. After that crisis subsided, the MVRV reclaimed the SMA365, hinting at a recovery.

While these indicators point to a period of short- to medium-term turbulence, none of them indicate that Bitcoin has reached the peak of an overheated cycle. Drawing comparisons to the carry trade crisis of August 2024, CryptoQuant analysis suggests that the current bearish signals may be related to macroeconomic conditions that are similar to those of last year. Once this macroeconomic pressure eases, Bitcoin is expected to rebound, but the market will have to wait and see if history repeats itself.

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