Bitcoin appears to be regaining momentum after a prolonged period of stagnation.
Following months of minimal movement, its price surged close to $98,000 and is currently maintaining levels above $96,000. Crypto traders are experiencing renewed optimism for the first time in quite a while. However, beneath this surface enthusiasm, skepticism remains about the sustainability of this upward trend.
Market analyst Michael Nadeau highlights that the underlying market structure suggests a more cautious outlook. He warns that unless certain conditions are met, this rally might lose steam.
The unseen factor restraining Bitcoin’s growth
A key influence on Bitcoin’s current trajectory isn’t hype or social media chatter but rather real interest rates.
Nadeau explains that Bitcoin tends to falter when real interest rates increase—a pattern clearly observed in 2022 when aggressive rate hikes severely impacted crypto valuations. Notably, since mid-October, real interest rates have been climbing again and Bitcoin’s correlation with them has turned negative.
Simply put, as safer investment options yield higher returns, capital often shifts away from riskier assets like cryptocurrencies. This dynamic quietly caps how high Bitcoin can climb during such periods.
The continuing relevance of cycles in cryptocurrency markets
The widely discussed four-year cycle for Bitcoin remains popular among traders. While Nadeau acknowledges these cycles exist, he cautions against viewing them as fixed patterns repeated identically over time.
“I firmly believe in cycles,” he states, but emphasizes that markets evolve continuously.
Rather than relying solely on calendar-based timing, he focuses on capital flow dynamics within the ecosystem. According to him, a typical crypto cycle unfolds through three distinct phases:
- An initial bullish surge
- A phase characterized by wealth accumulation
- A stage where accumulated wealth is redistributed
Upon analyzing these stages,Nadeau believes all three may already be behind us at present.
Indicators signaling an end to easy gains
The earlier part of the cycle witnessed explosive expansion: decentralized finance lending soared; crypto startups secured massive funding; IPOs and digital asset treasury strategies flourished; complex marketing campaigns were widespread.
This exuberance has now largely diminished.
Nadeau interprets this shift not as a fresh beginning but rather as a market entering consolidation—deciding which participants will remain and which will exit moving forward.
The critical threshold Bitcoin must surpass
From a technical standpoint,Nadeau closely monitors one key metric: the 50-week moving average (MA). “Bitcoin lost support at this level back in October before dropping approximately 35%,”””says Nadeau.
Since then,on-chain analytics reveal significant coin transfers indicative of late-cycle investor rotation.
He anticipated a rebound toward the MA zone around $101K-$102K,and recent price action nearing high $90Ks aligns with his expectations.
Yet there’s an important caveat:
Unless bitcoin can decisively break above—and sustain itself beyond—that moving average for several weeks,the current upswing won’t establish solid support.
Nadeau cautions,“i am not convinced this rally is durable yet”, emphasizing short-term gains alone don’t guarantee lasting strength.
ETFs provide some boost but aren’t decisive drivers
Positive developments include fresh inflows into bitcoin ETFs and reduced selling pressure due to long-term holders holding onto their coins instead of offloading them onto exchanges.
However,Nadeau views these factors as merely supportive rather than game-changing catalysts.
Without clear technical confirmation via breakout moves,demand from ETFs alone may fall short of propelling bitcoin into sustained long-term growth trajectories.
In upcoming weeks,the cryptocurrency must demonstrate it can convert resistance levels into reliable support zones if it hopes for continued upward momentum.
Failure to do so could relegate recent strength simply to another temporary pause instead of marking the start of bitcoin’s next major advance.