Bitcoin (BTC) continues its upward cycle, breaking record after record recently, but investors have begun to have questions about when this rise will end.
Bitcoin’s rise has been fueled by spot BTC ETFs trading in the US and Donald Trump’s media company’s purchase of crypto exchange Bakkt. BTC hit a new record high of $93,905 the other day. As the bull cycle continues with the entry of new investors into the growing crypto market, many are starting to wonder when a potential decline will begin.
On-chain data platform CryptoQuant has outlined five important indicators to consider to understand whether the BTC price has peaked and the bullish cycle has ended. However, it was emphasized that these metrics are not definitive and should not be evaluated in isolation.
MVRV, which is the ratio of Bitcoin’s market value to its realized value (cost), stands out as an important metric that shows whether it has reached the end of its bullish cycle. CryptoQuant states that if the MVRV ratio rises above 3.7, BTC will have reached the highest level it can reach and this level will signal the end of the cycle. Currently, the MVRV ratio is at 2.67 levels. In February 2021, when Bitcoin reached a historical peak of $ 60,000, the MVRV ratio rose to 7.
Another indicator that measures market sentiment is the Fear and Greed Index. CryptoQuant points out that BTC’s bullish cycle will end when the index rises above 80. The index was observed to be above 80 since November 12, and climbed to 90 on November 19. This is the highest value seen since February 2021.
According to CryptoQuant, the decline in new money inflows into the crypto market could be an indication that Bitcoin’s price has peaked. The decline in money flow could mean that the rally is over and a pullback is about to begin. According to current data, new money inflows are still at high levels.
The "Coin Days Destroyed" indicator shows whether long-term Bitcoin holders are actively selling. A rise above 15 to 20 million in this indicator could indicate a short-term decline in the BTC price. According to CryptoQuant, this indicator is currently at 15.1 million levels.
Finally, the Inter-Exchange Flow (IFP) indicator assesses whether BTC is being used as collateral on derivatives exchanges. CryptoQuant notes that IFP is still on an upward trend and traders are using BTC as collateral. Currently, IFP is at 730 thousand levels, and in the previous bull cycle this number reached 1 million. If these levels are reached, it is predicted that the cycle may have peaked.
