Original Title: Bitcoin’s metrics suggest bull market is far from overvalued
Original Author: ANA PAULA PEREIRA
Translation: Lawrence, Mars Finance
Although there has been a recent price adjustment, Bitcoin's valuation indicators still suggest a bull market cycle is forthcoming.
Bitcoin's valuation indicators suggest that the bull market is far from over and may lay the groundwork for further increases. Analysts currently expect a potential target price of $146,000 for this cycle, as there are no signs of overvaluation typically seen at price peaks.
Research firm CryptoQuant noted in a report on November 27 that the number of new Bitcoin holders is still lagging behind the levels of the previous cycle. Currently, new investors hold just over 50% of the total investment in cryptocurrency, whereas at previous market peaks (such as in 2017 and 2021), this ratio exceeded 90% and 80%, respectively.
The value of holdings for new investors is lower than during the previous bull market cycle. Source: CryptoQuant
These levels may be due to a slowdown in retail buying activity for Bitcoin in recent weeks. According to analysis, increased retail activity is typically indicative of a 'market cycle peak.' Since October, retail investors have sold off 41,000 BTC, while large investors have significantly increased their holdings by 130,000 BTC.
"Previous bull market cycles ended when retail investors were actively buying, but that is not the case now."
This shift indicates that market dynamics may be changing, with institutions and large participants driving the accumulation phase. Investors in exchange-traded funds (ETFs) led Bitcoin purchases in November, with weekly inflows skyrocketing to a record $3.1 billion for the week ending November 22, when the cryptocurrency reached a historic high of $99,655.50.
On November 26, Bitcoin's price fell to around $91,000, failing to break through the $100,000 resistance level. Some analysts believe that this cryptocurrency may still experience a 30% correction before breaking the six-figure mark.
CryptoQuant's bull-bear market cycle indicator has been in the bull market zone since early November and has been rising since.
However, this indicator still lags behind the overheated bull market phase last reached in March 2024, when Bitcoin hit new highs and traded above $70,000.
Despite some corrections, data shows that BTC is still in a bull market phase. Source: CryptoQuant
From a real price valuation perspective, Bitcoin's highest target price is currently $146,000. The report states: "In previous cycles, such as from April to May 2021, this price range was consistently the peak for Bitcoin prices."
"So far, the profit-loss index for this cycle has not reached overvalued levels, indicating that there is still room for price increases."
