Key Insights:
- On-chain data shows that Bitcoin’s rally has been strong, but lacks speculative overheating.
- Metrics like the MVRV ratio and SOPR show that there are currently limited signs of sell pressure.
- Analysts expect more all-time highs through the second half of the year.
Bitcoin is trading near its all-time highs again. However, this time around, the cryptocurrency market looks surprisingly calm. Despite the sharp price rise, analysts say there are no signs of speculative overheating.
On-chain indicators show that the rally is driven by steady, long-term momentum rather than hype or fear of missing out.
This lack of market froth has given analysts optimism. They believe that Bitcoin and the rest of the cryptocurrency market “might” have much more room to grow this year.
No Overheating in the Cryptocurrency Market
One of the clearest signals comes from CryptoQuant analyst Dan. According to a recent post on X, the on-chain data analytics platform acknowledged Bitcoin’s new ATH.
However, despite this, data shows that there are currently no serious indicators that the cryptocurrency market is overheated. CryptoQuant compared the current rally to those in March and December last year.
Back then, Bitcoin surged massively and showed high speculative activity. This time, however, the growth is more measured than ever before. On-chain activity is only slightly rising, so the current market is far from overheated.
MVRV & Z-Score Point to Sustainable Growth
The MVRV is one of the most popular metrics for tracking speculative behaviour in the cryptocurrency market. This ratio shows whether Bitcoin is trading far above its true cost basis.
Last year, for example, the MVRV ratio broke above 2.7. Also, it marked new Bitcoin peaks in March and December, respectively. Because of this, the 2.7 MVRV score has so far been associated with high speculation and risk.
Today, however, CryptoQuant data shows that the ratio is around 2.2. This is a clear indicator that the ongoing rally is more grounded. It also means that many investors aren’t overexposed. There’s room for more price increases without triggering a mass selloff.
The MVRV Z-Score, another variant of the MVRV, also supports this. It remains well below the “red zone” that often comes before market tops. As long as the score stays in this safer range, Bitcoin may continue climbing without harsh corrections.
Short-Term Investors Are Staying Out, for Now
Another signal to remember is the behavior of short-term holders, or those who’ve held Bitcoin for less than a month. During past surges, this cohort of investors made up about 30% of the cryptocurrency market.
According to CryptoQuant, that figure has now dropped to just 15%. This shows that new retail investors haven’t rushed in yet. In essence, speculation is currently limited.
In addition, the Short-Term Holder Spent Output Profit Ratio (SOPR) does not indicate aggressive profit-taking. When short-term holders start selling at a profit, it often leads to sudden price drops.
However, current SOPR levels show that investors hold their assets and may even wait for higher prices.
Miners Are Accumulating, Not Selling in Cryptocurrency Market
In previous cycles, Bitcoin miners often sold large portions of their holdings once prices spiked. This added supply to the cryptocurrency market and sometimes triggered corrections.
This time, though, the Miner Position Index (MPI) shows the opposite trend. Miners are reducing their selling activity and are instead holding onto their Bitcoin.
This change in miner behavior shows that confidence in Bitcoin’s long-term value is rising. It also reduces downward price pressure and helps to sustain the ongoing rally.
What to Expect for the Rest of The Year?
Considering the market now shows no signs of overheating, many analysts believe that Bitcoin may reach even higher levels. The Inverse Head and Shoulders (H&S) indicates that there could even be a rally to $160,000 by August or September.
In conclusion, despite soaring prices, the crypto market is not overheating yet. On-chain metrics like the MVRV ratio, SOPR, and MPI all point to steady, organic growth.
Moreover, the absence of a speculative frenzy across the market is an excellent signal for investors. It indicates that the market still has fuel left in the tank.
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