BTC may be approaching its market top based on its correlation with the S&P 500, but the MVRV Z-score indicates that there is still potential for upside. The price range of $60K to $71K has been stagnant for three months due to lower odds of Fed rate cuts, dampening breakout prospects in the short term. An analyst has suggested that BTC could be closer to its market top than anticipated, drawing comparisons with the SPX index.
The analyst noted that historically, BTC tops have followed SPX market cycle tops by about 134 weeks. This correlation could suggest that BTC may reach its cycle top by the end of July 2024, although correlations do not necessarily imply causation. Another user supported the SPX/BTC correlation, stating that as the SPX rises in value, investors may shift towards riskier assets like BTC. However, a recent report highlighted stagnancy in the Bitcoin network and potential profit-taking from long-term holders, serving as a warning sign for the market.
Despite concerns about approaching the market top, the MVRV Z-score indicates that there is still room for upward potential before BTC tops out. This metric removes short-term noise to assess BTC’s valuation relative to its fair value from a long-term perspective. Historically, BTC has topped when the metric reached the pink area of 7-9, but currently, it is slightly above 2, leaving room for growth. Another analyst remains optimistic about BTC’s future, suggesting that it could double in price based on comparisons with gold prices and gold ETF flows.
In conclusion, while BTC may be nearing its market top according to the SPX correlation, the MVRV Z-score indicates that there is still room for growth. Investors should keep an eye on market trends and indicators to make informed decisions about their BTC holdings. The potential for BTC to continue rising in value, especially when compared to gold prices, suggests that there may still be opportunities for profit in the cryptocurrency market. Stay informed and stay ahead of the curve to maximize your investment potential in the ever-evolving world of cryptocurrency.
Discussion about this post