Key Points
- Bitcoin’s MVRV metric suggests a potential price correction as it nears +5%.
- Despite the warning, exchanges have seen a significant outflow of $860.52 million, indicating strong investor confidence.
Bitcoin [BTC], the largest cryptocurrency by market capitalization, is potentially facing a price correction according to a key on-chain metric.
Currently, the market seems to be in recovery mode after a slight price drop following the South Korean president’s declaration of martial law.
Bitcoin’s MVRV Metric
The on-chain analytics firm Santiment reports that the average returns of Bitcoin wallets active in the past month have entered a danger zone. This zone is reached when BTC’s MVRV nears or surpasses +5%. The metric is currently at +4.2%, suggesting a possible price correction.
The MVRV metric is a crucial tool for traders and investors in strategizing their positions. A near +5% MVRV indicates a potential price correction, while a near -5% MVRV suggests a potential buying opportunity.
Significant Outflow from Exchanges
Despite the potential danger, there is strong interest and confidence in Bitcoin from whales and institutions. Data from Coinglass shows that exchanges have seen a significant outflow of $860.52 million over the past four days.
This considerable outflow indicates that investors are withdrawing tokens from exchanges to their wallets for long-term holding. This activity reduces the likelihood of selling pressure and attracts new investors.
Bitcoin’s Technical Analysis
According to technical analysis, Bitcoin is on an upward trend. It has found support from an upward-sloping trendline and is heading towards its all-time high near $100,000.
Current price action suggests it could rise by 3% to reach the $99,588 level soon. The asset’s Relative Strength Index (RSI) is at 55, below the overbought territory, indicating there is room for further growth.
As of now, Bitcoin is trading near $96,900 with an upward momentum of 1.75% in the past 24 hours. Its trading volume has increased by 7.5%, indicating increased participation from traders and investors.
