Bitcoin (BTC) may soon be preparing for a major bullish surge, with key on-chain metrics hinting that it could be on track to hit $120K in the coming months. While the cryptocurrency has been trading in a bearish zone, recent insights from the MVRV (Market-Value-to-Realized-Value) ratio and the Pi Cycle Top indicator suggest that a trend reversal may be imminent. Let’s break down these key signals and explore what they could mean for Bitcoin’s price trajectory in the near future.
Despite the persistent bearish market conditions, Bitcoin has continued to hold its ground. Over the past week, the king of cryptocurrencies dropped by 3%, and in the last 24 hours, it has remained in the red. As of writing, Bitcoin is trading around $68.4K, still below its recent highs but holding on to significant support levels.
Although the short-term outlook may appear gloomy, analysts have been eyeing key indicators that could suggest an impending trend reversal. Bitcoin’s struggle against resistance and its recent price action have prompted conversations about an eventual breakout that could trigger a bull rally, pushing prices toward the $120K mark.
A closer look at Bitcoin’s MVRV ratio, a critical metric that compares Bitcoin’s market value to its realized value, indicates that the asset is primed for potential upside. According to a recent analysis by CoinLupin, a CryptoQuant analyst, the MVRV currently sits at around 2. This indicates that the market’s surface value is currently about double the on-chain estimated value, signaling that Bitcoin is not yet overheated but may be in the early stages of an upward cycle.
CryptoQuant’s analysis used a combination of the 365-day Bollinger Band for MVRV and the 4-year average, which revealed that the peak of Bitcoin’s price cycle generally occurs when the MVRV reaches levels between 3 and 3.6. Historically, Bitcoin has seen major rallies following this metric’s rise. Based on this reading, if the realized value (RV) remains stable, the price of Bitcoin could potentially rise by 43% to 77%. This would suggest a price target of around $95K to $120K, marking a significant surge in the months ahead.
Another major indicator reinforcing the bullish sentiment is the Pi Cycle Top, which is widely regarded as a reliable signal of market tops and bottoms. Data from Glassnode reveals that Bitcoin’s price is fast approaching a potential market bottom at $62.7K, according to the Pi Cycle Top indicator. This suggests that Bitcoin is nearing the lower end of its current price cycle, with a possible market top lying near $116K.
When combined with the MVRV analysis, the Pi Cycle Top indicator paints a bullish picture for Bitcoin, supporting the notion that BTC could be preparing to push towards $120K over the next few months. While these indicators do not guarantee a surge to that level, they certainly increase the likelihood of a bullish shift in the market.
In the immediate term, Bitcoin’s market conditions remain uncertain. While the long-term outlook appears promising, Bitcoin is currently testing its 20-day Simple Moving Average (SMA), a key resistance level. A successful breakout above this level could trigger the start of a bull rally, signaling the beginning of an upward trend that could push Bitcoin towards its targets near $95K to $120K.
However, if Bitcoin faces rejection at this resistance point, it could fall back toward $65K, retesting lower support levels. The upcoming days and weeks will be critical in determining whether Bitcoin can break through this resistance and initiate a rally or whether it will struggle to gain momentum.
On-chain data further supports the notion of a potential reversal. Bitcoin’s Binary CDD (Coin Days Destroyed) recently turned red, indicating that long-term holders have been holding onto their coins, showing confidence in Bitcoin’s future prospects. This suggests that market participants are not panicking, despite the recent price drops, and are maintaining a belief that Bitcoin will recover in the long run.
Additionally, Bitcoin’s NULP (Net Unrealized Profit/Loss) metric is showing a bearish phase, which means that investors are currently in a “belief” phase where they are sitting on high unrealized profits. This suggests that while there is some caution in the market, there is also optimism, and the current correction might be seen as an opportunity for long-term investors to accumulate more BTC.
The combination of the MVRV ratio, Pi Cycle Top indicator, and on-chain metrics suggests that Bitcoin is well-positioned for a potential bullish breakout in the coming months. While the short-term outlook may remain volatile and subject to market resistance, the long-term prospects are looking promising, with analysts predicting that Bitcoin could hit $95K to $120K if the current market cycle continues to unfold as expected.
As the market braces for the outcome of the U.S. presidential election and other global economic factors, Bitcoin traders and investors will need to closely monitor these key metrics and price levels. A breakout above resistance could signal the start of a strong bull run, while a rejection could see Bitcoin dip further before the next rally.
Steven is an explorer by heart – both in the physical and the digital realm. A traveler, Steven continues to visit new places throughout the year in the physical world, while in the digital realm has been instrumental in a number of Kickstarter projects. Technology attracts Steven and through his business acumen has gained financial profits as well as fame in his business niche. Send a tip to: 0x200294f120Cd883DE8f565a5D0C9a1EE4FB1b4E9
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