Bitcoin’s Next Big Surge? On-Chain Metrics Suggest a Price Shift Is Near

[Ben Graham]

Bitcoin (BTC) continues to face resistance just under the $120,000 mark, struggling to build enough momentum for a breakout. Over the past 24 hours, the cryptocurrency has remained in a tight trading range above $118,000, representing a slight decline of nearly 4% from its most recent all-time high.

Despite the lack of upward movement, analysts suggest that Bitcoin may be entering a phase of energy consolidation rather than signaling an imminent downturn.

According to data from CryptoQuant, two separate market analysts have shared their perspectives on BTC’s current cycle, focusing on long-term valuation metrics and investor activity patterns that could influence the next significant price movement.

Bitcoin MVRV Ratio Signals Potential Upside Momentum

CryptoQuant contributor CoinCare highlighted the role of the Market Value to Realized Value (MVRV) ratio in assessing Bitcoin’s position in its current market cycle.

The MVRV ratio measures whether BTC is trading above or below its perceived fair value, with readings below 1 often marking market bottoms and readings above 3.7 typically associated with market peaks.

In a recent post titled “The MVRV Indicator is Converging Toward Its 365-Day Moving Average. What Comes Next”, CoinCare explained that Bitcoin’s MVRV is currently at 2.2, gradually moving closer to its 365-day moving average.

“Historically, when the MVRV ratio converges toward its long-term average, it tends to rebound and move toward overvalued territory, often accompanying price growth,” the analyst noted.

Based on historical patterns, CoinCare expects BTC to continue consolidating before attempting another upward push, potentially retesting overvaluation levels if buying activity strengthens.

New Investor Activity Indicates Healthy Late Bull Cycle

A separate analysis from another CryptoQuant analyst, AxelAdlerJr, examined Bitcoin’s market structure based on investor dominance metrics.

The data showed that new investor dominance currently sits at 30%, significantly below levels that previously indicated overheated market conditions, which reached 64% and 72% during local price peaks in March and December 2024, respectively.

According to AxelAdlerJr, the steady increase in activity from new market participants since July 2024 suggests that fresh liquidity is entering the market, supporting ongoing bullish sentiment.

At the same time, long-term holders are selling moderately, with a coefficient of 0.3, meaning that the supply from coins held for three years or more is being absorbed without triggering sharp market corrections.

“This dynamic indicates that while new buyers are active, there is still space before the market reaches euphoric levels, which typically occur when new investor dominance exceeds 60-70%,” the analyst stated.

Featured image created with DALL-E, Chart from TradingView