There are five key warning signs when Bitcoin is nearing a price peak, and one of those indicators is already flashing red, says onchain data service CryptoQuant.
In a Nov. 19 X post, CryptoQuant shared its top indicators to watch when assessing whether or not Bitcoin’s price is nearing an unsustainable level.
Source: CryptoQuant
MVRV Ratio
The first signal is the “MVRV ratio,” which measures Bitcoin’s market value — the sum of all coins that have been mined — against its realized value, the sum of the latest selling price of all Bitcoin in circulation.
CryptoQuant said if this is over 3.7, it typically signals that Bitcoin has reached its peak valuation for the moment. It’s currently showing a score of 2.67, per CoinGlass data.
Bitcoin’s MVRV ratio reached as high as 7 in February 2021 when Bitcoin rallied to reach a historical peak of around $60,000.
Bitcoin’s historical MVRV score. Source: CoinGlass
Fear & Greed Index overheats
The next indicator to watch is the Crypto Fear & Greed Index, which measures market sentiment.
When the index hits 80 out of a total score of 100 — combined with other indicators — Bitcoin could be near a local top, CryptoQuant claimed.
The index has been above 80 since Nov. 12 and reached as high as 90 on Nov. 17 and Nov. 19 — its highest since February 2021.
The Crypto Fear & Greed Index has reached its highest point since 2021. Source: Alternative.me
New money inflows
The third signal looks at how much new money is coming into the market — without significant “new money flow,” the price of cryptocurrencies tends to stall and eventually pull back.
CryptoQuant said Bitcoin’s realized cap growth chart is the ideal tool to monitor how much money is flowing into the market, and it currently shows that new money inflows are still comparatively high, meaning Bitcoin is in a “bull phase.”
Coin Days Destroyed indicator
Another indicator assesses if long-term BTC holders are actively selling. The Coin Dats Destroyed tool shows the movement of Bitcoin that has lay dormant for long periods and checks if the coins are being sold.
If the indicator spikes above 15-20 million, CryptoQuant says this could be a short-term bearish signal for the price of Bitcoin. The indicator currently shows a score of 15.1 million.
The Coin Days Destroyed chart shows the amount of dormant Bitcoin being moved or sold. Source: CyptoQuant
Inter-Exchange Flow Pulse
The final indicator is the Inter-Exchange Flow Pulse (IFP) which monitors the movement of Bitcoin to and from derivates exchanges.
CryptoQuant said the IFP still shows a bullish structure, with traders still moving Bitcoin to derivatives exchanges to be used as collateral.
Bitcoin’s IFP is currently running around 730,000 and is moving in an uptrend. In previous bull runs, the IFP has reached as high as 1 million and sunk as low as 200,000 during the depths of the bear market in late 2023.
Bitcoin’s IFP is still consolidating in an uptrend. Source: CryptoQuant
The price of Bitcoin has continued to notch new highs since Donald Trump’s election, with its latest peak on Nov. 19 hitting over $94,100.
Some analysts think Bitcoin still has plenty of room left to run, including VanEck’s head of digital assets research, Matthew Sigel, who’s targeting a price of $180,000 BTC sometime next year.
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