Bitcoin (BTC) has recently shown remarkable performance, registering a monthly gain of 46.59% and pushing its market capitalization to $1.94 trillion.
Despite this positive momentum, the market seems to lack a clear direction currently. In the last 24 hours, BTC’s price has marginally increased by 0.80%, maintaining a period of consolidation.
An analysis by CryptoCrypto indicates that while BTC is currently range-bound, historical trends suggest that it usually breaks higher when market sentiment improves.
BTC Has Potential for Further Rally
According to a chart presented by Alex Adler Jr., Bitcoin is yet to reach its cyclical peak.
The chart evaluates BTC’s performance using the Simple Moving Average (SMA) Multiplier, a tool that monitors price trends throughout market cycles.
This analysis categorizes Bitcoin’s market sentiment into different phases using color-coded zones, from green (indicating the beginning of a cycle) to black (representing the peak of a cycle), covering stages from accumulation to peak speculation.
As mentioned by Adler, “The orange dot has arrived. Red, purple, blue, navy, and black—are coming.”
This implies that BTC still has a considerable distance to cover before reaching its cycle peak, with five more phases expected. Typically, these phases follow a predictable pattern, where the final “black” stage signals the start of a downturn.
If historical patterns hold, Bitcoin could surpass the widely anticipated target of $100,000, drawing significant attention from the market.
CryptoCrypto further delves into why Bitcoin, despite promising statistics, has not fully realized its rally potential yet.
Reduced Profit-taking Activity Hampers BTC’s Rally
According to the latest insights from CryptoQuant, heightened profit-taking actions have been slowing down Bitcoin’s price momentum, hindering substantial upward movements.
The Adjusted Spent Output Profit Ratio (aSOPR), which assesses whether investors are offloading their BTC holdings for profit or loss, stood at 1.049 currently.
A reading above 1 signifies that investors have been selling at a profit, intensifying pressure on BTC’s price and impeding its rally.
Moreover, the Take Buy/Sell Ratio, an indicator showing the dominance of buyers or sellers in the market, recorded 0.963 at the time of reporting.
This indicates that selling volume outweighs buying volume, tipping the scale in favor of bears and prolonging Bitcoin’s upward trajectory delay.
Investor Activity Prevents BTC from Plummeting
CryptoQuant’s report highlights active buying of Bitcoin (BTC) by U.S. investors recently.
The Coinbase Premium Index, reflecting the price variance between BTC on Coinbase and Binance, has climbed, reaching 0.1308, near its peak of 0.1384 in November.
A positive indication on this index (above zero) indicates heightened purchasing interest from U.S. investors compared to other markets.
This increased demand has played a role in stabilizing BTC’s price and preventing further downturns.