CryptoQuant Warns of Bitcoin (BTC) Top Following $94,000 New All-Time High

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As a seasoned analyst with over two decades of experience in financial markets, I have seen my fair share of market cycles and price fluctuations. While it’s always exciting to witness Bitcoin’s meteoric rise, it’s equally crucial to remain cautious and interpret signals correctly.

According to the top on-chain analysis company CryptoQuant, those who are counting on Bitcoin‘s (BTC) latest surge above $94,000 to continue should exercise caution. They suggest that the peak of this Bitcoin price cycle might be near at hand.

The study suggests important factors suggesting Bitcoin’s upward trend might be nearing its limit. One wonders if these markers truly warrant worry, or if there is still potential for further growth in the rally.

Bitcoin Could Soon Be Overvalued, CryptoQuant Says

As an analyst, I find that the Market Value to Realized Value (MVRV) ratio, as suggested by CryptoQuant, can be a telling sign of whether Bitcoin’s current price has peaked. This MVRV ratio is a crucial tool for determining if Bitcoin’s price is inflated or underestimated in the market.

Historically, a MVRV ratio (Market Value to Realized Value) exceeding 3.7 has usually signaled market peaks and overvaluation, while values below 1 have typically indicated market bottoms and undervaluation. Currently, the MVRV ratio for Bitcoin stands at 2.62.

It implies that the price of Bitcoin might no longer be considered underpriced. Although it hasn’t yet reached the point of being overvalued, further growth may potentially lead Bitcoin towards an overvalued state.

Furthermore, it was noted by the data provider specializing in blockchain that the Cryptocurrency Fear and Greed Index has moved into the “intense optimism” zone, suggesting that Bitcoin’s peak price could soon be reached.

According to current observations, these findings correspond with recent analyses by BeInCrypto and a warning from CryptoQuant’s CEO, Ki Young Ju, who has predicted possible dangers that the market may face as we move towards 2025.

The company additionally highlighted that Bitcoin isn’t experiencing any significant inflow of fresh funds right now. This was clearly indicated by the 365-day Realized Capital Growth rate, a tool often used to distinguish between bull and bear market stages.

According to X, for prices to remain robust, there needs to be a continuous influx of fresh funds into the market. If the inflow isn’t sufficient, the market pressure could potentially drive prices up.

As seen above, Bitcoin has recently seen an inflow of capital. But most of it has come from old money, suggesting retail investors are yet to exert a lot of pressure. Meanwhile, it also disclosed that the fact that long-term holders are selling could restrict BTC from going as high as investors desire.

BTC Price Prediction: Higher Highs Before Correction

As I write this, Bitcoin’s value stands at approximately $94,248, and it’s being exchanged within a rising trendline pattern known as an ascending channel. Furthermore, the Bull Bear Power (BBP), a tool that gauges the balance between buyers and sellers, is currently indicating a bullish sentiment.

If the Balanced Buy Pressure (BBP) rises, this indicates that bulls have the upper hand and the Bitcoin price may continue to rise. Conversely, when the BBP drops into negative territory, it shows bears are dominating, which could imply a potential decrease in the Bitcoin price. Presently, the BBP reading suggests that the peak of the Bitcoin price might not have been reached yet.

If things go as expected, Bitcoin might surge up to around $100,000. But, if the MVRV ratio starts approaching 3.7 and the currency fails to attract fresh funds, a possible correction to approximately $80,795 may occur instead.

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2024-11-20 18:30