It appears that Bitcoin has finally emerged from weeks of stagnation With an increase of 11%This indicates a noticeable shift in market momentum. The move is expected to have sparked renewed interest from various market participants who may be keen to return to the market.
However, an influential on-chain analyst has come out to explain why Bitcoin traders should be cautious during this phase of the cycle. According to one market expert, the optimal entry point may not actually be close to current price levels.
MVRV Ratio, Realized Price reveals short-term strength, but not the market high
In a recent Quicktake post on the CryptoQuant platform, on-chain analyst GugaOnchain said I searched Here are the reasons why it may not be the right time to return to the Bitcoin market. The critic began by highlighting changes in the market value to realized value (MVRV) ratio, along with those from the realized price metric.
According to GugaOnchain, the MVRV ratio is currently above the 30-day moving average of 1.2947, indicating that Bitcoin’s recent bullish price movement has gained validity. Supporting this trend, the buy/sell ratio of Bitcoin recipients on Binance also showed increased buying aggressiveness, reinforcing the idea that market participants are actively pushing prices higher.
At the same time, Bigger macroeconomic picture It shows that the market has not yet entered an overheated phase. This is because the current MVRV reading around 1.3856 is well below the 365 simple moving average (known as the macro line), which stands at around 1.8620.
Technical Indicators Suggest Bitcoin Market Is Overextended – Is a Correction Next?
However, from a price action perspective, Bitcoin price may already be due for a bounce. According to a market analyst, Bitcoin recently broke through the ascending channel resistance on the daily time frame – a typical move for a bullish continuation.
However, the Relative Strength Index (RSI) is now showing signs of tension. This is due to the recent RSI readings of 67.85, which stands near the overbought zone at 70.
As such, the Bitcoin market rose Chances of decline In the near term. The analyst then concluded that it would be better to buy Bitcoin “not at the break of resistance,” but at the bottom of the correction instead.
In a scenario where the price of Bitcoin declines, the cryptocurrency expert explained that this would be towards “channel support” – specifically at levels between $70,000 and $65,000. As of this writing, Bitcoin’s price is around $77,014, reflecting a 2.8% jump since the last day.
