Onchain data service says there are five key indicators that may guide investors to determine if Bitcoin is closing in on a local top.
There are 5 key warning signs when bitcoin is nearing a price peak according to onchain data sevice. In a Nov. 19 X post, CryptoQuant shared its top indicators to watch out for when accessing if Bitcoin’s price is nearing an unstable level..
MVRV Ratio
This is the first signal “MVRV ratio ” which measures Bitcoins market value ie the sum of all coins that have been mined—against its realised value, the sum of the latest selling price of Bitcoin in circulation. CryptoQuant said if it is over 3.7, it’s a clear signal that Bitcoin has come to its peak valuation for the moment, it’s currently showing a score of 2.67,–from coinglass data. In the past Bitcoins MVRV ratio got up to 7 in February 2021 when Bitcoin rallied to reach a historical peak of about $60,000.
Fear and Greed Index overheats
The next indicator to watch is the Crypto Fear and Greed Index, which actually measures market sentiment. When the index hits 80 out of a total score of 100-combined with other indicators—Bitcoin could be near local top, -“CryptoQuant” The index has been above 80 since Nov. 12. And reached as high as 90 on Nov. 17 and Nov.19–it’s Thursday
February of 2021.
New money inflows
This signal observes how much new money is coming into the market– without significant”new money flow,” the price of cryptocurrencies tends to stall and most surely take a pullback. CryptoQuant said Bitcoin’s realized cap growth chart is the ideal tool to monitor how much money is flowing into the market, and it currently shows that new money inflows are quite high, i.e. Bitcoin is in a “pull phase”
Coin days Destroyed indicator
This indicator assesses long-term BTC holders who are actively selling. The coin Days Destroyed tool shows the movement of Bitcoin that has been dormant for long periods and checks if they are being sold. If the indicator spikes above 15-20 million, CryptoQuant says this could be a short-bearing signal for the price of Bitcoin. The indicator currently shows a score, of about 15.1 million
Inter-Exchange Flow pulse
The final indicator is the inter-Exchange Flow Pulse(IFP), which monitors the movement of Bitcoin to and from derivatives exchanges. CryptoQuant said that the IFP still shows a bullish structure, with traders still moving Bitcoin to derivatives exchanges to be used as collateral .
The price of Bitcoin has continued to top new heights since Donald Trump’s Election, with its latest peak being on Nov. 19th Hitting over $94,000, including Some analysts think that Bitcoin has plenty of room from the Left to the right.
