Analyst: Three Key Indicators Show Bitcoin Has Not Yet Reached Cycle Top

BlockBeats News, January 16th, an analyst from the cryptocurrency asset management company 21Shares stated that several "on-chain" metrics indicate that Bitcoin has not yet reached a cycle peak and still has room to rise. However, compared to previous cycles, the launch of a Bitcoin ETF in early 2024 and increased institutional participation in the crypto market may have also altered the behavior of some key indicators.

The analyst pointed out that currently, Bitcoin's MVRV ratio is between 2.5 and 3, suggesting a potential local peak but still significantly below 7, indicating that the major cycle top has not been reached. Only when the Bitcoin price exceeds $200,000 can its MVRV ratio reach 7.

With Bitcoin's trading price nearing $100,000, its unrealized gains have been fluctuating between 0.5 and 0.75, indicating potential selling opportunities. However, the analyst stated that only when the unrealized gains reach 0.75 can it indicate an exuberant or greedy sentiment, suggesting that the market has peaked.

When Bitcoin hit a historic high in mid-December last year, the sell-side risk ratio of long-term Bitcoin holders (measuring the extent of profit-taking by investors compared to previous market cycles) reached around 0.4%. On-chain analysts tend to believe that the market will only enter an overheated state when this ratio approaches or exceeds 0.8% (Jinse)