Zooming out on Bitcoin through the MVRV, measuring the magnitude of profits, it is notable that it stabilized in an “intermediate top” zone at 1.27, showing slight warming but still with much room to reach the top where we will find extreme euphoria.
Through Net Realized Profit, a derivative of Realized Cap that also measures the magnitude of profits, there is a slight cooling from $10B to $3B, a drop of 30% compared to November, the reduction suggests a positive sign for the market reducing supply and selling pressure. This means that LTH has realized most of its profits at this stage and is ready to see further increases.
Through the 90-Day Markevs. vs. Realized Price Gradient Oscillat, we can see the difference between the market price and the realized price for 90 days. It is in an equilibrium zone of 0.5, demonstrating a strong balance between underbought and undersold. It suggests that we could see the price in its upward phase, demonstrating an optimistic market in the short term.
The high supply that was increasing supply by $73B/month received a prompt response on the demand side with ETF inflows reaching $38B/month and aggressive MicroStrategy purchases of around $15.7B/month, around 440K Bitcoins in the wallet. Another factor for the optimistic sentiment is the US Bitcoin reserve, the Fed meeting on December 18th, and the purchase of Bitcoin by some of the mining companies such as MARA acquiring 11.78K Bitcoins worth $1.1B.
The end of the year tends to be quiet and calm but positive, our fuel tank still needs energy and therefore we cannot neglect a correction to support the rest of the climb with metrics even more balanced towards growth. Healthy market at this point!
Written by Percival
