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

on

  • 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. 

Source: Glassnode


Read Bitcoin’s [BTC] Price Prediction 2024-25


The king coin’s Money Flow Index (MFI) also supported the bears as it registered a sharp downtick.

Nonetheless, the Relative Strength Index (RSI) looked bullish and indicated that BTC’s price might continue to rise in the coming days. 

Source: TradingView