Cryptocurrency analytics firm CryptoQuant has assessed Bitcoin’s recent rally and concluded that the bull market remains strong despite the recent price correction.
Bitcoin reached an all-time high of $99,900 last week but has since retreated to around $93,000. At the time of writing, another recovery is underway. According to CryptoQuant, onchain fundamentals suggest that BTC is far from reaching the top of the market.
CryptoQuant’s analysis highlights that Bitcoin’s realized price valuation (an indicator based on the average price at which all coins have recently moved) has set an upper target of $146,000. Historically, this valuation level has marked the peak of Bitcoin cycles, as seen in January 2021 and April-May 2021.
“From a realized price appreciation perspective, Bitcoin has room to grow before reaching the overvalued levels that typically precede the end of a bull cycle,” CryptoQuant said.
One of the critical factors that signals the market’s top is the activity of new Bitcoin investors. Currently, the value held by new investors accounts for just over 50% of the total money invested in Bitcoin. This figure is significantly lower than the peaks seen in the 2017 and 2021 cycles, when new investors held 90% and 80% of the total value, respectively.
“Bitcoin price peaks typically occur when new investors rush to buy at extremely high prices and hold a large portion of the total value. That is not the case today,” the analyst firm noted.
Another characteristic of previous market peaks, high individual activity, is also absent from the current market. While individual investors have reduced their Bitcoin holdings by 41,000 BTC since October, large investors have increased their holdings by 130,000 BTC during the same period.
“Previous bull cycles ended when retail investors were buying aggressively. Today, retail activity remains subdued,” it said.
The CryptoQuant tool, the Bull-Bear Market Cycle Indicator, remains concentrated and in the “BULL” phase. The indicator is still far from the “EXTREME BULL” phase that historically signals the end of bull markets, most recently seen in March 2024 when Bitcoin surpassed $70,000.
While the broader outlook remains bullish, CryptoQuant pointed out a potential short-term hurdle. MicroStrategy’s stock price, which has surged 113% since Nov. 3 amid Bitcoin’s rally, appears overheated relative to the value of the company’s Bitcoin holdings. The stock price is currently nearing the upper end of its valuation bands, indicating a potential correction that could indirectly impact Bitcoin’s momentum.
*This is not investment advice.