CryptoQuant, a cryptocurrency analysis company, said that Bitcoin fell back from the $100,000 level after continuously setting new highs, but this was only a "temporary setback" and it will break through this important level and even challenge higher prices.
Multiple on-chain data indicators show that Bitcoin still has a lot of room to rise, and the bull market still has some distance to go before it peaks. CryptoQuant's self-developed "Profit and Loss Index (P&L Index)" shows that Bitcoin is currently firmly in a bull market, but it is far from reaching the overvalued levels set at the peaks of the market in 2021, 2017 and 2017. This index combines several on-chain valuation indicators to assess whether the Bitcoin price is "overvalued" or "undervalued."
The firm’s bull-bear market cycle indicator has only started to rise after dipping slightly into bear market territory earlier this year when bitcoin retreated to $50,000 from a record high of $73,000 in March. The indicator is still well below the overheated levels seen in March.
Meanwhile, retail investor participation remains muted, contrary to the typical “frenzy buying” observed at the top of previous cycles. According to CryptoQuant, retail investors have sold 41,000 bitcoins since October, possibly to take profits, but at the same time, large investors have increased their holdings by 130,000 bitcoins.
New investors are not in a hurry to enter the market now. The value of Bitcoin held by these new investors (or addresses that have only started holding Bitcoin within six months) accounts for 50% of the total value invested in Bitcoin (the upper limit has been realized), which is far lower than the level of 80% to 90% in 2017 and 2021. Analysts said:
When prices peak, new investors enter the market, usually at extremely high prices, causing them to hold a large portion of their total investment in Bitcoin. Previous bull cycles ended when retail investors bought in heavily, but this is different.
Although Trump's election as US president pushed Bitcoin close to $100,000, it subsequently fell 9% from its latest record high and is currently priced at around $96,631.
Despite the Bitcoin market's pullback, CryptoQuant analysts said it is only a matter of time before it breaks through the $100,000 mark.
Previous Bitcoin bull markets have peaked near the upper limit of the "realized price index," which is four times the average price of the last transfer of all circulating Bitcoins. Data shows that the current realized profit Bitcoin price is $36,000 to $37,000 and rising rapidly, which means the current upper limit is $147,000.
According to CryptoQuant, if history repeats itself, Bitcoin could reach at least $147,000 before reaching the upper limit of this market cycle.
CryptoQuant is not the only firm bullish on Bitcoin’s rise. Recently, Galaxy Research said that Bitcoin prices are expected to reach $100,000 in the short term, and may go higher due to the continued increase in institutional adoption and the possibility of establishing Bitcoin national reserves.
