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As Bitcoin breaks the $94,000 barrier, CryptoQuant warns of five crucial indicators that could signal a looming price peak. The MVRV ratio and Fear & Greed Index are hitting critical levels, prompting analysts to advise caution amid the market euphoria.
CryptoQuant Highlights Red Flags in Bitcoin’s Price Surge
Onchain data service CryptoQuant states that there are five critical warning indications that Bitcoin is about to reach its price high, and one of those signs is now flashing red.
To determine if the price of Bitcoin is approaching an unsustainable level, CryptoQuant presented its top indications in a post on November 19th, X.
The first indicator is the "MVRV ratio," which compares the market value of Bitcoin (the total of all mined coins) with its realized value (the total of all Bitcoins sold recently) to determine its health.
The MVRV Ratio Indicates Market Health
According to CryptoQuant, once this figure rises above the 3.7 mark, it usually means that Bitcoin's valuation has peaked for the time being. Based on the data provided by CoinGlass, it presently has a score of 2.67.
In February 2021, during Bitcoin's historic rally to a peak of almost $60,000, the MVRV ratio hit a maximum of 7.
Next up on the list of market attitude indicators to keep an eye on is the Crypto Fear & Greed Index.
Market Sentiment Peaks with Fear & Greed Index
According to CryptoQuant (via Cointelegraph), Bitcoin might be approaching a local top when the index reaches 80 out of a total score of 100, in conjunction with other indicators.
Index readings above 80 have been consistent since November 12, with peaks of 90 on November 17 and 19 (the highest since February 2021).
The third indicator considers the amount of fresh capital entering the market; when there is little "new money flow," cryptocurrency prices tend to plateau and subsequently retreat.
New Money Flow Keeps the Rally Alive
Bitcoin is currently in what CryptoQuant calls a "bull phase" because the realized cap growth chart—the perfect instrument for monitoring market capitalization—shows that new money inflows are relatively strong.
Checking if long-term Bitcoin holders are selling actively is another indicator. If you want to see if Bitcoins that have been idle for a while are being sold, you can use the Coin Days Destroyed tool.
Long-Term Holders and Coin Days Destroyed
According to CryptoQuant, a short-term adverse signal for the price of Bitcoin could be indicated if the indicator surges beyond 15-20 million. The current score displayed by the indicator is 15.1 million.
The Inter-Exchange Flow Pulse (IFP) tracks the flow of Bitcoin to and from derivatives exchanges, making it the last indicator.
Inter-Exchange Flow Pulse Reveals Trader Behavior
Bitcoin is still being moved to derivatives exchanges to be utilized as collateral, according to CryptoQuant, and the IFP continues to display a positive structure.
At present, Bitcoin's IFP is hovering at 730,000 and is trending upward. During prior bull runs, the IFP hit 1 million, and during the late 2023 bear market, it dropped below 200,000.
After Donald Trump's victory, the price of Bitcoin has risen steadily, reaching a new high of almost $94,100 on November 19th.
Matthew Sigel, head of digital assets analysis at VanEck, is aiming for a price of $180,000 BTC early next year, and he is one of several analysts who believe Bitcoin still has a lot of space to grow.
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