Bitcoin (BTC) has experienced a period of subdued price action, leaving many to question whether the cryptocurrency is nearing its cycle top. However, according to Chris Burniske, a former executive at Ark Invest and current venture capitalist at Placeholder, this dip is far from signaling the end of the bull market. Instead, he believes that Bitcoin is simply undergoing a “mid-bull pullback.”
In a recent statement, Burniske compared the current market to the sharp pullbacks seen in 2021. He pointed to the substantial price drops between April and June 2021 when Bitcoin fell from $64,000 to $30,000, only to rebound later that year and reach a new all-time high of $69,000. This historical pattern, he argues, suggests that the market is simply experiencing a temporary correction, not the peak of the bull cycle.
“I don’t think this is a sign of cycle top, rather a mid-bull pullback that makes everyone question god. Feels a lot more like April, May, June of 2021 to me, where things fell 50-80% depending on the coin, many said it was over, top-callers gloated, and then we ripped in 2H ’21,” said Burniske.
While the market has been relatively flat since the inauguration of President Donald Trump, Burniske’s view is that this price action is part of a normal, healthy correction in the ongoing bull market. Still, the question remains: will Bitcoin replicate the 2021 scenario, or is this pullback a precursor to something more significant?
Supporting Burniske’s hypothesis are several on-chain indicators, including the Short-Term Holder (STH) MVRV ratio. This metric, which tracks the profitability of Bitcoin held by short-term holders, has recently cooled from an overheated market to more neutral levels. CryptoQuant’s Axel Adler noted that a drop in the STH MVRV ratio suggests that a portion of short-term holders have sold their positions, signaling the end of a local overheated phase.
“An STH MVRV above 1.30–1.35 typically signals an overheated market, often leading to sell-offs. The decline in the indicator suggests that a portion of STHs have exited their positions. A return to average levels points to the end of a local overheated phase,” explained Adler.
While this decline could signal the end of a local bull run, Adler suggests that if the STH MVRV ratio falls below its historical average, Bitcoin could be nearing a local bottom. This aligns with the idea that Bitcoin is undergoing a correction, rather than hitting its cycle top.
Another key indicator to watch is the Short-Term Holder Realized Price (STH RP), which represents the average price at which Bitcoin was acquired by short-term holders over the past 1 to 3 months. Currently, this price level stands at $96,000. Historically, the STH RP has served as both support and resistance for Bitcoin’s price. If Bitcoin continues to trade below this level, it could trigger panic selling among short-term holders, potentially driving the price lower.
However, if Bitcoin is able to hold above the $96K level, it could provide a foundation for a price recovery. Over the past few days, Bitcoin has tested this support level, following a sharp drop to $91,000 on February 3rd. Since then, the cryptocurrency has remained above $96,000, suggesting that this level may act as support during this current pullback.
Another important factor in Bitcoin’s price outlook is network activity, which has recently hit yearly lows. According to Adler, this decline in activity could indicate that Bitcoin is overvalued and may be due for a price adjustment. If the market recalibrates, Bitcoin could either stabilize at the $96K level or dip lower before finding new buying opportunities.
While a retracement is possible, Adler suggests that this could offer a new entry point for investors if the price continues to fall. Even with the dip, Bitcoin’s long-term outlook remains bullish, as the fundamental factors supporting its value are still strong.
As Bitcoin continues its mid-bull pullback, investors will be watching closely to see whether it can maintain support at the critical $96K level. If the price holds steady, it could provide the foundation for a rebound in the coming months. Conversely, if Bitcoin fails to sustain its position and falls below this level, further downside could be expected.
In the near term, the market will likely remain volatile, with a potential for significant price swings. Investors should monitor key indicators such as the STH MVRV and STH RP to gauge the market’s strength and determine the best entry points. Burniske’s analysis suggests that Bitcoin’s cycle top is not yet here, and that the mid-bull pullback may ultimately lead to a strong rally later in the year. Whether history will repeat itself remains to be seen, but for now, the outlook for Bitcoin’s future remains promising.
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