Having surpassed the significant milestone of $100k, Bitcoin [BTC] saw a retracement, dipping close to the $98k range. Slowly but steadily, the dominant cryptocurrency was once again edging towards the coveted triple-digit territory.
Nonetheless, BTC is now poised to encounter several challenges ahead, potentially leading to a market correction.
Bitcoin Nearing $100k Once More, Yet…
Over the past 24 hours, Bitcoin’s price underwent consolidation, exhibiting minimal movement. As of the latest data, the flagship cryptocurrency was trading at $99.6k, boasting a market capitalization exceeding $1.97 trillion.
Despite this gradual climb towards $100k, the likelihood of a successful breach appears uncertain due to an emerging critical metric.
IntoTheBlock, a data analysis platform, recently highlighted Bitcoin’s MVRV ratio in a social media post. According to the update, BTC’s MVRV was nearing all-time high levels.
Typically, an increase in MVRV often precedes market corrections.
Historically, Bitcoin has faced similar pullbacks in 2018, 2021, 2022, and 2024. If this historical pattern repeats itself, investors in BTC should brace for an imminent price adjustment.
Is a Price Correction Unavoidable?
Not only did the MVRV ratio issue a cautionary signal, but several other on-chain metrics painted a similar narrative. For instance, Bitcoin’s dominance has been dwindling recently.
The dominance ratio plummeted from 53.7% to 51% last week, indicating a potential onset of a new altcoin season.
According to Glassnode’s data, Bitcoin’s NVT ratio witnessed a sharp uptick. A surge in this metric typically suggests an overvaluation of the asset, hinting at an impending price correction.
Data from CryptoQuant also highlighted some bearish metrics. The net deposits of BTC on exchanges surged compared to the average of the past seven days, indicating escalating selling pressure on the cryptocurrency.
Moreover, the aSORP indicator turned red, signifying an increased number of investors selling at a profit, a signal that could mark a market peak amid a bull run.
Furthermore, recent reports from CryptoCrypto indicated that miners were displaying diminished confidence in BTC by offloading their holdings.
To be precise, over the last 48 hours, BTC miners have divested a substantial 85,503 BTC, driving miner balances down to approximately 1.95 million BTC — the lowest level in several months.
The technical indicator MACD exhibited a bearish stance within the market. In the scenario of a price correction, BTC might retrace towards its support level around $95.8k, with a breach potentially pushing BTC towards $91k once more.
However, the Money Flow Index (MFI) displayed an upward trend, suggesting a probable continued uptick in prices. This momentum could propel BTC back above $100k in the approaching days.