Bitcoin’s metrics suggest bull market is far from overvalued
Bitcoin’s valuation metrics suggest the bull market is far from over and could be setting the stage for even further highs. With no signs of overvaluation typically seen at price peaks, analysts are eyeing a current potential target of $146,000 in this cycle.
In a Nov. 27 report, research firm CryptoQuant notes that the value held by new Bitcoin ( BTC ) holders still lags behind previous cycle levels. Holdings of new investors currently sit just above 50% of the total invested in the cryptocurrency, while in previous market tops, such as 2017 and 2021, it was at over 90% and 80%, respectively.
New investors’ holdings value is below previous bull cycles. Source: CryptoQuant
These levels may be justified by a slow retail activity in Bitcoin purchases over recent weeks. According to the analysis, heightened retail activity is often a “typical condition of market cycle tops.” Since October, retail investors have reduced their holdings by 41,000 BTC, while larger investors have significantly increased their holdings, adding 130,000 BTC.
“Previous bull cycles have ended when retail investors were buying aggressively, which is not the case today.”
The shift suggests a potential transition in market dynamics, with institutional and large-scale players driving the accumulation phase. Investors on exchange-traded funds (ETFs) led the purchases of Bitcoin in November, with weekly inflows soaring to a record $3.1 billion in the week ending Nov. 22 — when the cryptocurrency price reached a record of $99,655.50.
The Bitcoin price declined to around $91,000 on Nov. 26, failing to break the $100,000 resistance level. For some analysts, the cryptocurrency may still see a 30% correction before crossing the six-figure milestone.
CryptoQuant’s bull-bear market cycle indicator has been in the bull area since early November and has been rising since then. However, the indicator still lags from the overheated bull phase reached for the last time in March 2024, when Bitcoin achieved a new high, trading above $70,000.
Related: Altseason delayed due to lack of fresh retail capital — Ki Young Ju
Despite corrections, data shows BTC still in a bull phase. Source: CryptoQuant
From a realized price valuation perspective, Bitcoin’s top price target is currently at $146,000. “This price band has acted as a top for the price of Bitcoin in previous cycles, such as in April-May 2021,” states the report. “The P&L Index has not reached overvalued levels so far this cycle, which indicates the price would still have room to increase.”
Bitcoin has yet to enter the overvalued territory. Source: CryptoQuant
Magazine: Crypto has 4 years to grow so big ‘no one can shut it down’: Kain Warwick, Infinex
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
OpenAI secures $1.5B funding from SoftBank, allows employees to cash out
Lawsuits could be catastrophic for DAOs if denied ‘limited liability’
XRP Hits $2.6 Billion In This Key Metric Fueled By Three Major Events
XLM, UNI and AAVE gain double-digits as BTC reclaims $94k