Bitcoin Bull Market Metrics Point to Stable Growth with No Signs of Bubble
In a recent report, CryptoQuant analyst Axel Adler has highlighted two key metrics that suggest Bitcoin’s current bull market is on a stable trajectory with no significant signs of a correction.
The first metric, the Bubble vs Crush Market Structure, has decreased to a score of 1.02, which Adler deems to be the baseline. This indicates that Bitcoin’s market capitalization is not outpacing its realized capitalization, suggesting the absence of a market bubble. This stands in contrast to when Bitcoin reached its peak of $73,679, with the indicator signaling a bubble at around 1.5. Subsequently, the price dropped 16% to $61,930.
Since July 22, Bitcoin has been trading in a 40% range, fluctuating between a low of $49,842 and a high of $69,799, struggling to maintain the critical $60,000 level. At the time of publication, Bitcoin is trading at $59,236.
The second metric, the 30-day Moving Average (DMA) MVRV Z-Score, is at 1.8, slightly above Bitcoin’s annual average of 1.6, indicating minimal overvaluation. A surge in the 30DMA MVRV Z-Score can serve as a warning sign of overvaluation and an imminent price correction. In March 2021, the 30DMA MVRV Z-Score exceeded 5, just before Bitcoin reached a peak of $60,701, and later declined by 45% to $32,827 by July.
Both the Bubble vs Crush Market Structure and the MVRV Z-Score are pivotal metrics for assessing potential overvaluation in Bitcoin. As long as these metrics do not reach extreme levels that could indicate a substantial risk of correction, the market can be deemed bullish, as per Adler.
Amidst this, several traders have commented on Bitcoin’s prolonged consolidation of late. Pseudonymous crypto trader Ash Crypto referred to the current phase as the “boring phase” that occurs before and after the halving. Another pseudonymous crypto trader, Rekt Capital, suggested that Bitcoin is poised to reclaim its Post-Halving ReAccumulation Range, indicating potential upward movement in the coming months.
It is important to emphasize that this article does not offer investment advice or recommendations. It is imperative for individuals to conduct their own research and seek professional guidance before making any investment or trading decisions. Every investment and trading decision carries risk, and it is essential for readers to be well-informed before taking any action.
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