Bitcoin is causing the counters to panic with a price approaching $110,000. Indeed, yesterday, BTC exceeded $108,000 before falling around $103,000. The 50% increase since the start of November is significant, but funding rates are falling in parallel. The market therefore does not seem to be in an excess of speculation, on the contrary, but what do the technical and on-chain indicators say? Is BTC close to a market top? In The Market Check, the objective is to determine whether BTC is close to a market top like in 2017 or like in 2021. Let’s go and analyze the Bitcoin situation right away!
Bitcoin falls slightly, but remains in bull market conditions
The course of Bitcoin fell almost 5% in the space of a few hours. For beginners, this may seem like a lot, but the drop is barely noticeable if we take a step back. Thanks to the transparency of the blockchain, we are able to know the average purchase price of short-term holders (orange curve).
This is the average acquisition price of operators who purchased BTC recently (less than 155 days). And this data is very interesting, because it allows us to give a price zone where the price could rebound in the event of a fall. On-chain experts estimate that the price of the first capitalization of cryptocurrencies is bullish as long as it remains beyond this threshold. Because as soon as the course fall below the orange curveBTC tends to experience bearish volatility like in May 2021 or like in 2022:
Currently the course is developing well above the realized price of short-term holders. The conditions are even reminiscent of those of bull run of 2021. The orange curve is moving upwards day by day, and it is now around $85,0000. In theory, a fall to this level should cause a buyer reaction important. However, it is difficult to know whether correction is imminentor if she could arrive in a few months. As explained in the introduction, what we know is that the funding rates are not at excess levels as in March.
The Bitcoin bear market can wait
In the same way as the previous on-chain indicator, the following technical indicators allow you to know the general trend of the cryptocurrency market:
The course evolves significantly beyond the various moving averages displayed on the graph. There trend is clearly bullish For now. In the event of a fall, these moving averages could act as dynamic support. They are located around the 70 000 $and they will rise as the price of Bitcoin climbs or stabilizes. During the last 2021 bull marketthe price had only returned to these curves during the nice you bull run.
Euphoria dominates the cryptocurrency market
We notice that the market sentimentgiven by the Crypto Fear and Greed Index (CFGI), evolves upwards during a bull market period. Also, the CFGI tends to remain in euphoria zone (blue) for several weeks or even months. This is totally logical, because the price rise (with the volatility that we know about cryptocurrencies) generates a significant bullish sentiment. And sooner or later, the market corrects these excesses.
The CFGI is currently in zone d’euphorieas during the most volatile phase of 2020-2021. And shortness of breath could be recorded on this indicator in the event of divergence from price. From March 2021, the course continued to climb, but the CFGI no longer posted new highs. And this showed that the price was less and less supported by investors. The CFGI is currently 87, less than November 22 (94). We will have to see if the trend continues, or if the indicator picks up speed in the coming days and weeks.
The bull market is far from over according to the Puell Multiple
Difficult to know when the market will completed its upward cycleand we can even wonder if the cycles will continue over time. But since the creation of Bitcoin, we have noticed that the market follows up and down cycles. These phases can be seen at a glance thanks to thePuell Multiple indicator :
When the indicator is in the red zone, you have to be careful. On the other hand, when it evolves in the green rectanglehe was until now it pays to take risks. And at the time of writing these lines, theindicator is still far from being in the overheating zone. Be careful, he could be wrong in the future, but it is an additional element which shows that the market is not overheating like in 2021.
The excesses of 2017 and 2021 would still not have been reached
With a BTC over $100,000we are entitled to wonder if the market is not in the process of overheat. The indicator below brings together several indicators such as MVRV, SOPR, Puell Multiple and Reserve Risk. When the indicator is on overheatedwe see the appearance of beige on the graph:
Or, well that they BTC performance is exceptional since the start of 2023, we can clearly see that there is no no negative signal on the graph. In addition to this, if the cycles continue, the presence of a first beige vertical line does not indicate a market top. Indeed, Bitcoin tends to stay overheated for some time before recording a peaka bit like the CFGI market sentiment indicator.
Key points to remember
Whether on-chain or technical, all the indicators analyzed today lean towards a continuation of the upward trend in the weeks and months to come. Despite everything, we must keep in mind that much more significant corrections will arrive. Despite the 600% rise since Bitcoin’s 2022 market low, indicators are not giving bearish signals at the moment. Bitfinex analysts even believe that it is likely that Bitcoin could only be at the start of a crazy bullish climb.
