According to CryptoPotato, Bitcoin recently surpassed the $70,000 mark before experiencing a correction and dropping to around $68,000. Despite this, data suggests that the bull market is far from over, and Bitcoin could be set for further gains, according to an analysis by CryptoQuant.
The analysis examined the Market Value to Realized Value (MVRV) ratio, a key metric in determining the state of the market. Historically, the MVRV ratio peaked at 4.83 and 3.97 in past bull markets. Currently, the MVRV ratio stands at 2.78, suggesting that Bitcoin has not yet entered the overvalued zone and could potentially see further price increases.
After a period of sideways movement and adjustment lasting over two months since Bitcoin entered the overheated section in March 2024, CryptoQuant predicts a likely upward trend starting as early as June. The asset has surged by approximately 152% over the past year, with over 60% of the growth in 2024 alone driven by the approval of spot Bitcoin ETFs in January and the recent halving event.
Market participants are closely watching the Federal Reserve's prospects for rate cuts, as such actions could trigger a stock market rally. This expectation extends to Bitcoin, which behaves like a speculative asset that tends to rise when borrowing costs are low. The record high Bitcoin reached in 2021 was primarily due to ultra-low interest rates, which later reversed as the Fed began tightening its monetary policy.
Galaxy CEO Mike Novogratz echoed a similar sentiment in a recent interview, discussing the impact of the recent halving and the massive adoption of ETFs on Bitcoin's price trajectory in the first quarter of the year. He added that the market's attention has shifted to the Federal Reserve's actions regarding interest rates. Novogratz also noted that until the Fed lowers short-term interest rates, Bitcoin is expected to trade within a range of $55,000 to $73,000, indicating a period of relative stability influenced by broader economic policies.