- Considering the current market condition and history, BTC may not be overvalued.
- The chances of hitting $68,000 in the next are low, but an upside remains very potent.
The value of Bitcoin [BTC] has increased by almost 15% in the last seven days, bringing the Year-To-Date (YTD) performance closer to 100%. Consequently, market players are fearful that the coin price could be on the verge of a significant reversal.
However, that might not be the case because of a recent IntoTheBlock post on X (formerly Twitter). According to IntoTheBlock, the current market did not imply that BTC was overvalued.
Stop underestimating the cycle
The blockchain insight platform came to the conclusion by looking at the signs that a bull market has begun. A bull market is a market condition where the price of Bitcoin and other cryptocurrencies has more of an upside for a long while.
Bitcoin’s MVRV ratio reveals we’re not in overheated territory yet. Past bull markets peaked at 300%+ MVRV, while we’re currently at 150%.
Dive deeper: https://t.co/8Xjm1DrCms pic.twitter.com/LM7DkdCeNG— IntoTheBlock (@intotheblock) October 28, 2023
Besides the bull market signals, IntoTheBlock also considered the Market Value to Realized Value (MVRV) ratio. The MVRV ratio uses the division of the market cap by the realized cap to find how much of a fair value a cryptocurrency is.
From a trader’s perspective, a 150% jump in the MVRV ratio means that it could be time to short Bitcoin. Short, here, means opening a futures position predicting a decrease in the asset price.
Meanwhile, from historical data as far back as 2014, a 150 % spike in the metric is not enough to stop the rally in an early bull market.
So, AMBCrypto’s earlier discussion about a rise to $40,000 could remain on the cards. Also, Bitcoin’s Open Interest coined from HyblockCapital’s data showed that the indicator remained flat.
An increase in Open Interest, along with an increase in price, is an upward trend confirmation. Conversely, an increase in Open Interest along with a decrease in price confirms a downward trend
Doesn’t look like $68,000 season yet
At press time, BTC was consolidating around $34,000. So, taking price action and Open Interest together, a reversal could be on the horizon. Hence, the gains shed by BTC may soon be recouped in a few days.
However, hitting double its current price a few months from now could be challenging. But from the Accumulation/Distribution (A/D) line, an upward move still seems like a possible direction for BTC. This is because the A/D has been increasing.
Source: HyblockCapital
Meanwhile, indications from the Bollinger Bands (BB) showed extreme volatility for Bitcoin. The expansion of BB means that the coin’s price could fluctuate in either direction. Should buying pressure increase, BTC has the tendency to increase far higher than $$34,000.
For now, the Bitcoin price can increase. But to hit $68,000 looks like a big deal that needs much more impact than market activity.
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