Bitcoin’s Metrics Indicate Bull Market Is Not Overvalued

Bitcoin’s valuation metrics are indicating that the bull market still has room to run, despite recent price corrections. Analysts are optimistic about the potential for even higher highs, with a current target of $146,000 in this cycle.

According to a report from CryptoQuant on Nov. 27, the value held by new Bitcoin holders is lower compared to previous bull cycles. In past market tops, new investors held over 90% and 80% of the total invested in Bitcoin, whereas now they hold just above 50%. This suggests that there is still room for growth as new investors continue to enter the market at a slower pace.

Retail activity in Bitcoin purchases has been subdued in recent weeks, which is a contrast to the typical frenzy seen at market cycle tops. Retail investors have been reducing their holdings by 41,000 BTC, while larger investors have been increasing theirs by 130,000 BTC. This shift in dynamics indicates a transition, with institutional and larger players now driving the accumulation phase.

Exchange-traded funds (ETFs) have been leading the charge in Bitcoin purchases, with weekly inflows hitting a record $3.1 billion in the week ending Nov. 22, when the price of Bitcoin reached an all-time high of $99,655.50. Although the price corrected to around $91,000 on Nov. 26, failing to break the $100,000 resistance level, analysts believe that a 30% correction may still be on the cards before the cryptocurrency hits the six-figure milestone.

Despite these corrections, data shows that Bitcoin is still in a bull phase. The CryptoQuant bull-bear market cycle indicator has been in the bull area since early November, indicating that there is still room for growth. The realized price valuation perspective suggests a top price target of $146,000, which has historically acted as a ceiling for Bitcoin’s price in previous cycles.

Overall, Bitcoin has not yet entered the overvalued territory, leaving room for further growth. The current market dynamics and investor behaviors point towards a continuation of the bull market, with institutional players taking the lead in driving the price action. With no signs of overvaluation, the future looks bright for Bitcoin as it continues its journey towards new highs.