Bitcoin

Bitcoin crosses $71K, but now there’s a massive cause of worry

Bitcoin’s price gains bullish momentum as it crosses the $71k mark. But buying pressure increases.

Published

8 months ago

April 8, 2024

Edited By: Saman Waris

BTC was up by more than 1.8% in the last 24 hours.
A metric pointed out that BTC might be overvalued.

After days of volatility and uncertainty, Bitcoin [BTC] recovered and went beyond the $70k. A major reason behind its price decline since the 2nd of April was huge profit realizations, amounting to over $2.7 billion.

However, BTC showed why it was King for a reason, recovering soon and trading at $71,178.80 at press time, having risen 2.39% in the last 24 hours, per CoinMarketCap

Bitcoin is recovering

IT Tech, an author and analyst at CryptoQuant, recently posted an analysis highlighting the factors that helped BTC recover swiftly.

As per the analysis, a factor behind the price improvement was a drop in selling pressure as short-term holders have stopped realizing losses on the price correction.

Bitcoin has always had a strong correlation with Tether [USDT]. In the recent past, new USDTs were minted, which could have also contributed to BTC’s recovery above $70k.

Moreover, there was a huge BTC inflow to the accumulation addresses, and their reserves hit an all-time high. All of these incidents combined lend BTC a helping hand, allowing it to push its price up.

Will the trend last?

Since BTC managed to push its price above $71k, AMBCrypto checked CryptoQuant’s data to see whether it would witness a price correction anytime soon.

We found that buying pressure on BTC was high, as its net deposit on exchanges was low compared to the last seven-day average.

Its Coinbase Premium was also green, meaning that buying sentiment was dominant among US investors.

Long-term holders’ movements in the last seven days were lower than average, signaling that they were willing to hold their assets.

Source: CryptoQuant

Though the aforementioned metrics looked optimistic, AMBCrypto’s look at Glassnode’s data revealed a bearish signal. Bitcoin’s Network Value to Transactions Ratio registered a sharp uptick.

A rise in the metric means that an asset is overvalued, hinting at a price drop.