Bitcoin [BTC] maintained a bearish stance with both its daily and weekly charts showing negative trends. However, recent analysis has hinted at a potential reversal in the near future. Hence, CryptoCrypto delved deeper to explore the possibility of a changing trend.
Is Bitcoin Heading Towards $120,000 in the Near Future?
The leading cryptocurrency experienced a 3% price decline last week, extending the bearish trend in the last 24 hours as it traded at $68,400 at the time of writing. Despite the prevailing bearish sentiment, a CryptoQuant analysis suggested a significant uptrend in the offing.
According to CoinLupin, an analyst at CryptoQuant, a recent study focused on BTC’s MVRV ratio, which currently stood at around 2. This index indicates that the market value is double the on-chain estimated value.
Utilizing the 365-day Bollinger Band for MVRV and the 4-year average, the analyst assessed Bitcoin’s cycle. The analysis indicated that the uptrend remains strong, with cycle peaks historically occurring at MVRV levels between 3 and 3.6.
The study suggested that for Bitcoin to reach $95,000 to $120,000, a surge of 43% to 77% was necessary, assuming the realized value (RV) remains constant.
To validate the potential movement towards $120,000, CryptoCrypto scrutinized Glassnode’s data. The Pi Cycle Top indicator highlighted that Bitcoin’s price was nearing its potential market bottom at $62,700, with its likely market peak around $116,000.
Therefore, considering the Pi Cycle Top signal and the CryptoQuant analysis, the projection of Bitcoin making its way towards $120,000 in the upcoming months appeared plausible.
What Lies Ahead for BTC in the Short Term?
While the future outlook for BTC appeared optimistic, the current scenario raised uncertainties.
Hence, AMCrypto analyzed its on-chain data to gain insights into Bitcoin’s trajectory amidst the anticipation surrounding the U.S. presidential election results. The analysis revealed that BTC’s binary CDD turned red, signifying a decrease in movement by long-term holders.
The NULP indicator also flashed a bearish signal, indicating that investors were currently in a phase of high unrealized profits, contributing to a belief stance.
Examining BTC’s daily chart provided further clarity on market indicators. Bitcoin was currently testing resistance at its 20-day Simple Moving Average (SMA).
A successful break above this level could trigger a bullish rally. However, a rejection might push BTC back to $65,000 support once again.