Bounce (AUCTION) has experienced an extraordinary surge of 140.89% since last Saturday, reaching $60.3 at the time of writing. This dramatic price movement has raised considerable attention, and many are wondering whether AUCTION will continue to climb toward a new all-time high (ATH) or if now is the right time for investors to take profits. On-chain data and market analysis point to both short-term bullish trends and signs of potential caution, creating a mixed outlook for the altcoin.

Price Action and Market Sentiment

AUCTION’s impressive rally in recent days has led to significant trading volume, with a daily volume of $1.33 billion, compared to a market cap of just $395.84 million. This gives AUCTION a volume-to-market-cap ratio of 335%, which is exceptionally high, signaling strong market interest and bullish sentiment. However, the price is now just 17% shy of its all-time high of $70.44, raising concerns about potential overextension.

The Money Flow Index (MFI), which tracks the flow of money into and out of an asset, is currently at 97, its second-highest reading since July 2023. This suggests that the asset is nearing overbought territory, further hinting at the possibility of a price correction or consolidation.

On-Chain Metrics and Whale Activity

While AUCTION’s price action has been bullish, its on-chain metrics provide some cautionary signals. The decline in the supply held by whales since mid-February suggests that larger market participants are using the current rally to take profits. This distribution phase is important as it often signals a shift in market sentiment, potentially leading to downward pressure.

Moreover, the Mean Coin Age, which measures how long coins have been held on average, has been trending downward since February. This suggests increased movement and selling activity among holders, further supporting the notion that the rally might be driven by profit-taking rather than long-term accumulation.

The 30-day Market Value to Realized Value (MVRV) ratio is another indicator to watch. At 92.98%, this is the highest it has been since December 2023, suggesting that short-term holders are sitting on significant profits. While this may encourage continued buying in the short term, it also raises the risk of a pullback as profit-taking intensifies.

Price Targets: Will AUCTION Reach New Highs?

For those looking to hold through the rally, Fibonacci extension levels provide key price targets. The next resistance level stands at $76.23, with the 100% Fibonacci retracement level at $93.25 marking the ultimate target. These price levels are achievable, especially considering the relatively low market capitalization of AUCTION ($404 million). If the market sentiment remains strong, AUCTION could potentially reach these targets in the short to medium term.

However, given the current market sentiment and the overbought signals from the MFI and MVRV, taking profits may be a prudent strategy for many investors. The risk of a price correction is high, especially with whale distribution and the overextended nature of the rally.

Conclusion: Take Profits or Hold On?

AUCTION’s recent price surge has created a buzz in the market, and the altcoin could potentially hit new all-time highs if it continues its bullish momentum. However, with signs of whale distribution, high MVRV, and overbought conditions, investors may want to consider taking profits. For those still holding, the next targets lie at $76.23 and $93.25, but the risk of a pullback remains significant. As always, careful monitoring of market conditions and on-chain metrics will be essential in determining whether AUCTION can maintain its upward trajectory or if the rally will fade.