Originally published on: November 27, 2024
Bitcoin’s valuation metrics are signaling that the current bull market still has room to grow, with analysts eyeing a potential target of $146,000 in this cycle. Unlike previous market peaks, there are no signs of overvaluation, indicating that the upward trend may continue.
According to a recent report by research firm CryptoQuant, the value held by new Bitcoin holders is below levels seen in previous bull cycles. New investors currently account for just over 50% of the total investment in the cryptocurrency, compared to over 90% and 80% in past market tops.
This lower percentage of holdings by new investors is attributed to subdued retail activity in Bitcoin purchases over the past few weeks. Typically, heightened retail activity is a sign of a market cycle top. In contrast, retail investors have reduced their holdings by 41,000 BTC since October, while larger investors have been accumulating, adding 130,000 BTC.
This shift in dynamics suggests that institutional and large-scale players are driving the current accumulation phase. ETF investors, in particular, have been leading the way with record weekly inflows of $3.1 billion in November, coinciding with Bitcoin’s price hitting a record high of $99,655.50.
While Bitcoin’s price retraced to around $91,000 after failing to breach the $100,000 resistance level, some analysts believe a 30% correction could be on the horizon before the cryptocurrency reaches six figures. However, CryptoQuant’s bull-bear market cycle indicator remains in the bull zone, indicating continued bullish momentum.
From a realized price valuation perspective, Bitcoin’s top price target is currently at $146,000. This price level has historically acted as a ceiling for Bitcoin’s price during previous cycles. The P&L Index, which measures profit and loss, has not reached overvalued levels yet, suggesting that there is still room for further price appreciation.
In conclusion, despite potential corrections along the way, data indicates that Bitcoin is still firmly in a bull phase with significant upside potential. As the market dynamics shift towards institutional and larger investors, the stage is set for further highs in the ongoing bull market. Subscribe to the Markets Outlook newsletter for more critical insights on investment opportunities and trading strategies.
