Bitcoin [BTC] is once again nearing the psychological milestone of $100,000. After briefly dipping to the $98,000 range following its historic $100k breach, the flagship cryptocurrency shows resilience. Yet, some critical on-chain metrics and market trends suggest a price correction may be imminent.

BTC at $100k: A Slippery Slope?

Bitcoin’s recent price action has been relatively muted, consolidating around $99,600 with a market capitalization exceeding $1.97 trillion. Despite its steady approach to reclaiming the $100k mark, warning signs are flashing across the market.

MVRV Ratio: A Historical Predictor of Corrections

One of the most telling indicators is Bitcoin’s Market Value to Realized Value (MVRV) ratio. According to analytics platform IntoTheBlock, BTC’s MVRV is nearing historically high levels that have preceded major price corrections.

Past instances in 2018, 2021, 2022, and earlier in 2024 have shown that elevated MVRV ratios typically signal overvaluation and lead to pullbacks. If this pattern holds, Bitcoin investors might soon face a significant price correction.

On-Chain Metrics Add to Bearish Signals

Several other on-chain metrics align with the bearish narrative:

1. Declining BTC Dominance Bitcoin’s dominance in the crypto market has dropped from 53.7% to 51% in just a week. This suggests that investors are turning their attention to altcoins, potentially signaling the onset of an altcoin season.
2. NVT Ratio Indicates Overvaluation Glassnode’s data revealed a sharp increase in Bitcoin’s Network Value to Transactions (NVT) ratio. This rise often points to overvaluation, hinting at a potential correction in BTC’s price.
3. Rising Exchange Deposits Crypto Quant data shows that Bitcoin’s net deposits on exchanges have spiked compared to the seven-day average. This indicates growing selling pressure as investors move their holdings to exchanges, possibly preparing to take profits.
4. Profit-Taking by Investors The Adjusted Spent Output Profit Ratio (a SORP) has turned red, reflecting increased profit-taking activity. This metric is often viewed as a sign of a market top during a bull run.

Miners Add to Selling Pressure

BTC miners have also joined the selling spree, further amplifying bearish sentiment. Over the past 48 hours, miners offloaded a staggering 85,503 BTC, reducing their total holdings to approximately 1.95 million BTC — the lowest level seen in months.

This aggressive selling suggests miners are hedging against potential downside risks in Bitcoin’s price.

Technical Analysis: Key Levels to Watch

Bitcoin’s technical indicators offer a mixed picture.

• MACD: The Moving Average Convergence Divergence (MACD) shows bearish momentum, suggesting a price correction might push BTC to its $95,800 support level. A further dip could see BTC testing $91,000.
• MFI: On a positive note, the Money Flow Index (MFI) has registered an uptick, indicating continued buying interest. This could propel BTC back above $100k in the near term.

The Road Ahead for Bitcoin

Bitcoin’s journey toward sustained levels above $100k is fraught with challenges. While bullish sentiment persists among some market participants, bearish signals from key metrics like the MVRV and NVT ratios cannot be ignored.

If a price correction materializes, BTC could revisit support levels near $95,800 or even $91,000. However, strong buying momentum reflected in the MFI suggests a rebound above $100k remains within reach.

For now, investors should brace themselves for heightened volatility as Bitcoin navigates these critical levels.