As a seasoned crypto investor with years of rollercoaster rides behind me, I find myself cautiously optimistic about Bitcoin‘s current trajectory. While the recent surge to $108,000 has made many of us feel like we’ve struck gold, I remember too well the pain of the 2017-2018 bubble and subsequent crash.
Currently, a single Bitcoin (BTC) is valued approximately $94,000. Earlier in the week, it traded at over $108,000. Despite traders cashing out some of their gains, experts predict that Bitcoin may continue to increase in value.
Based on a post by Rafael Schultze-Kraft, one of the founders of the on-chain market analytics platform Glassnode, approximately 20 graphs and measures indicate that Bitcoin may not have reached its peak for this cycle.
More Room for Growth
The Market Value to Realized Value (MVRV) ratio, a tool that assesses potential profits yet to be realized, stands approximately at 3. This metric typically warns of market overheating when it exceeds 7, suggesting there’s still potential for Bitcoin prices to increase further. Additionally, the most extreme MVRV Price Band, derived from counting days when the MVRV reached such levels, is currently at 3.2.
Schultze-Kraft pointed out that examining long-term holder profitability measures such as Relative Unrealized Profit (RUP) and LTH Net Unrealized Profit/Loss can provide insights into the potential for profit-taking risks. Recently, these metrics have reached the ‘euphoria zone’, surpassing the 0.75 level. In 2021, Bitcoin saw a roughly 3x increase when these indicators entered this zone and peaked when they exceeded 0.9+.
Another metric to look at is the Yearly Realized Profit/Loss Ratio, which monitors coin spending among investors. The Glassnode founder disclosed that this indicator peaked above 700% in previous cycles, however, it is currently around 580%.
One more indicator to watch is the Market Cap to Thermocap Ratio, which is not close to previous extremes. Historical data has shown that BTC tops occur when this metric reaches a multiple of 32-64; however, the metric currently hovers at the bottom of this range. The top band of this metric will put Bitcoin’s market cap above $4 trillion.
BTC Top at $230K?
Additionally, the Investor Tool’s estimation predicts that Bitcoin might peak at around $230,000. However, the Bitcoin Price Thermometer metric presents an opposing view, projecting a maximum of $151,000 for Bitcoin.
Furthermore, the Value Days Destroyed Ratio is currently 2.2. This ratio compares short-term coin days destruction to the annual average, and it indicates that older coins are being spent at a rate higher than usual, potentially outpacing demand. At its previous extreme values exceeding 2.9, this indicator suggests there’s still potential for further growth.
Schultze-Kraft presented various tools such as the Mayer Multiple, the Cycle Extremes Oscillator Graph, the Pi Cycle Top Signal, the Long-Term Holders Inflation Rate, the Sell-side Peril Ratio, and the Short-term Holder Realized Profit Gauge.
Despite varying placement of Bitcoin’s peak among these indicators, they collectively imply that the cryptocurrency is roughly midway through its current bullish trend.
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2024-12-20 20:50