Bitcoin’s price has been steadily rising since Donald Trump’s election, with its latest peak on Nov. 19 hitting over $94,200. CryptoQuant, an onchain data service, has identified five key warning signs that indicate whether or not the cryptocurrency is nearing an unsustainable level.
One of these indicators is already flashing red: the Coin Days Destroyed (CDD) tool, which measures long-term Bitcoin holder activity. According to CryptoQuant, a CDD score above 15-20 million could be a short-term bearish signal for the price of Bitcoin. The current score is 15.1 million.
Another indicator is the MVRV Ratio, which compares Bitcoin’s market value against its realized value. If this ratio exceeds 3.7, it typically signals that Bitcoin has reached its peak valuation for the moment. Currently, the ratio stands at 2.67.
The Crypto Fear & Greed Index is also above 80, a level associated with local tops according to CryptoQuant. This index measures market sentiment and has been consistently high since Nov. 12.
New money inflows into the market are still relatively high, which could be a sign of Bitcoin’s “bull phase.” However, if this trend reverses, the price may stall or pull back.
Finally, the Inter-Exchange Flow Pulse (IFP) indicates that traders are still moving Bitcoin to derivatives exchanges for collateral. A value above 1 million has been reached in previous bull runs, which could suggest a strong bullish sentiment.
Some analysts believe Bitcoin still has room left to run, with targets of $180,000 by next year. However, these indicators suggest caution is warranted as the price nears its current level.
Source: https://cointelegraph.com/news/warning-signs-bitcoin-nearing-price-peak-crypto-quant