The cryptocurrency market saw positive movements in early May, but doubts are still prevalent. There are mixed opinions regarding a potential bullish trend, particularly as Bitcoin surpasses a significant psychological barrier.

While some view current signals as a precursor to an upcoming bullish cycle, others caution that external factors might be distorting the market indicators. This article delves into these contrasting viewpoints by leveraging on-chain data and historical trends.

Is the Crypto Market Poised for a Bullish Momentum?

CryptoQuant's Bull-Bear Market Cycle Indicator, developed to identify bullish and bearish trends in the crypto space, has recently displayed optimistic signals.

Since February 24, 2024, the indicator consistently suggested a bearish market sentiment. Nonetheless, it has now started showing indicators of a potential shift.

Yet, the signal remains somewhat ambiguous and weak. Previously, during mid-2024, this same indicator provided misleading forecasts, with the market remaining stagnant for a prolonged period without a clear trend.

An analyst named Burakkesmeci introduced insights based on the 30-day and 365-day moving averages (30DMA and 365DMA) to illuminate the bullish potential.

"The Bull-Bear 30DMA, a short-term moving average, has turned upward, which could lead to parabolic Bitcoin rallies if it crosses over the Bull-Bear 365DMA, based on historical trends," predicted Burakkesmeci.

However, an analyst by the name of Darkfost expressed a more cautious viewpoint while examining the Growth Rate Indicator, which evaluates the Bitcoin market's state—bullish or bearish—by comparing the Market Cap and Realized Cap of Bitcoin.

Darkfost observed that the indicator is returning to a bullish state concurrently with Bitcoin reclaiming the critical $100,000 mark.

Rather than prophesying the conclusion of the bearish market and the onset of a bull phase, Darkfost suggested that this could be a deceptive recovery prompted by specific circumstances.

These circumstances include the signing of a trade agreement between Donald Trump and the UK, which helped alleviate concerns over tariff shocks, alongside the Federal Reserve's conservative stance of maintaining unchanged interest rates.

"It's plausible that conventional market dynamics may continue to be disrupted, making it challenging to interpret the current landscape," remarked Darkfost.

Furthermore, the Crypto Fear & Greed Index surged to 73, stepping into the "Greed" zone—its highest level in two months. This implies a transition in investor sentiment from caution to enthusiasm.

Nonetheless, elevated levels of "Greed" or even "Extreme Greed" often function as cautionary signals. Historically, these levels have preceded significant price corrections.