Bitcoin’s Price Resilience Signals Continued Strength Despite Speculation of Cycle Peak
Since the inauguration of President Donald Trump, Bitcoin has shown a stable price performance, prompting discussions about a possible peak in the current cycle among market analysts.
Nevertheless, Chris Burniske, a former crypto executive at Ark Invest and now a venture capital partner at Placeholder, has a different outlook. Burniske is of the opinion that the market is currently experiencing a “mid-bull pullback” and that the cycle peak has not been reached yet. According to him,
“I believe this pullback is not indicative of a cycle peak but rather a mid-bull retracement that creates doubts for many. It feels reminiscent of the period between April and June 2021 when prices dipped by 50-80% across various cryptocurrencies. Despite naysayers calling the end, we witnessed a strong rally in the second half of 2021.”
Referring to historical data, Bitcoin fell from $64k to $30k in the initial months of 2021 but then surged in the latter half to reach $69k. Whether this historical pattern will repeat itself remains uncertain.
Bitcoin’s Crucial Threshold of $96k
Validation for Burniske’s forecast can be found in a significant valuation metric known as the Short-Term Holder (STH) MVRV, as highlighted by Axel Adler from CryptoQuant. Adler suggested that the market might be moving away from a localized state of overheating, given the decrease in STH MVRV from 1.35 to neutral levels.
According to Adler,
“When the STH MVRV exceeds 1.30–1.35, it usually indicates an overheated market, often resulting in sell-offs. The decline in this metric implies that some STHs have exited their positions. Returning to average levels could signal the end of a local overheated phase.”
Adler added that a drop below the average STH MVRV might signify a local bottom, similar to what occurred last September. The market’s future trajectory in this regard hinges on potential tariff announcements by President Trump, given the prevailing market uncertainty.
Conversely, the Short-Term Holder realized price (RP) currently stands at $96k, representing the average acquisition cost of BTC over the past 1-3 months. This level has historically acted as both support and resistance for Bitcoin’s price movements.
Should the price fall below this level, it could trigger panic selling among these holders, leading to losses. Conversely, a bounce from $96k could help sustain the upward trend.
Recent market activity has seen Bitcoin’s price attempting to hold above $96k after dropping to $91k on February 3. Additionally, Bitcoin network activity has dipped to yearly lows, a potential indication of overvaluation according to Adler. In case of a repricing, Bitcoin could either maintain $96k or drop below it, offering fresh buying opportunities in the event of extended retracement to lower ranges.