Bitcoin, the largest cryptocurrency in terms of market capitalization, seems to face a possible downturn as indicated by a significant on-chain measure.
Currently, the overall market is showing signs of recovery after a slight price dip following the announcement of martial law by the president of South Korea.
Caution Indicated by Bitcoin’s MVRV Metric
According to insights from Santiment, a firm specializing in on-chain analytics, the average returns from active Bitcoin wallets in the last 30 days have entered a risky territory.
When BTC’s MVRV approaches or surpasses +5%, it signifies a potential correction in its price. Presently, the metric stands at +4.2%, signaling an impending correction in the price.
MVRV serves as a vital on-chain metric utilized by traders and investors for decision-making. A value near +5% indicates a likelihood of a price correction.
Conversely, nearing -5% MVRV suggests a potential buying opportunity and hints at an imminent price surge.
Significant Withdrawals from Exchanges totaling $860 million
Despite Bitcoin’s price residing in the risky zone, large investors and institutions have displayed a strong faith in the asset. Data from Coinglass on BTC spot inflow/outflow reveals a substantial outflow of $860.52 million from exchanges over the last four days.
This considerable outflow signifies that whales or investors have moved tokens from exchanges to their wallets with the intention of holding them for the long term.
Exchange outflows are also viewed as a bullish indicator as they diminish the chances of selling pressure and attract new investors to the market.
Bitcoin’s Technical Analysis and Key Threshold
As per CryptoCrypto’s technical analysis, Bitcoin is currently on an upward trajectory. It recently found support from an upward-sloping trendline and is aiming towards its all-time high close to $100,000.
Based on recent price movements, there is a strong likelihood of a 3% increase reaching the $99,588 mark in the upcoming days.
On a positive note, the Relative Strength Index (RSI) for Bitcoin is at 55, indicating a position below the overbought range. This suggests that there is still room for Bitcoin to surge in the days ahead.
As of now, Bitcoin is trading around $96,900 with a 1.75% uptrend in the past 24 hours. Trading volume during the same period has risen by 7.5%, indicating increased involvement from traders and investors amid an optimistic market outlook.