Key Points
- Bitcoin’s selling pressure is increasing, potentially leading to a price correction.
- On-chain metrics and the MVRV ratio suggest Bitcoin may be overvalued.
Bitcoin’s selling pressure appears to be growing, potentially pointing towards a price correction that could push the cryptocurrency down to $95.8k.
After surpassing the significant $100k mark, Bitcoin experienced a pullback, bringing it down to the $98k range. The cryptocurrency is slowly making its way back towards the triple-digit mark.
Obstacles Ahead for Bitcoin
Despite this, Bitcoin faces several hurdles that could result in a price correction. The cryptocurrency’s price has been consolidating over the past 24 hours with marginal movement. Currently, Bitcoin is trading at $99.6k, with a market capitalization exceeding $1.97 trillion.
However, a slow approach towards $100k may not be successful as a key metric, the MVRV ratio, is on the rise. Data analytics platform IntoTheBlock highlighted this in a recent tweet, noting that Bitcoin’s MVRV is nearing historic peak levels.
Price Correction on the Horizon?
The MVRV ratio isn’t the only indicator suggesting a price correction. Other on-chain metrics, such as Bitcoin’s declining dominance and a sharp uptick in the NVT ratio, suggest the asset may be overvalued.
Data from CryptoQuant also points to several bearish metrics. Bitcoin’s net deposit on exchanges is high compared to the past week’s average, indicating increased selling pressure. Furthermore, the aSORP has turned red, suggesting more investors are selling at a profit.
Alongside this, miners are reportedly losing confidence in Bitcoin, as evidenced by the sale of their holdings. Over the past 48 hours, miners have sold an astonishing 85,503 BTC, reducing miner balances to approximately 1.95 million BTC – the lowest level in months.
The technical indicator MACD shows a bearish advantage in the market, suggesting that in the event of a price correction, Bitcoin could drop to its support near $95.8k. However, the Money Flow Index (MFI) indicates a possible continued price rise, potentially pushing Bitcoin above $100k again in the near future.
