- Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half.
- Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
- Traders should be cautious as some BTC investors and miners are booking profits and increasing the selling pressure.
Bitcoin (BTC) surged up to 16% in the first half of the week, reaching a new all-time high of $93,265, followed by a slight decline in the latter half. Reports suggest the continuation of the ongoing rally as they highlight that the current trading level is still not overvalued and that project targets are above $100K in the coming weeks. However, this optimism could not last long as some BTC holders and miners realize profits and increase the selling pressure, which could lead to a pullback to $78K.
Why Bitcoin could reach $100K in the upcoming weeks?
Bitcoin reached a new all-time high (ATH) of $93,265 this week, rallying over 35% since the US Presidential election on November 5. “Bitcoin is still not overvalued,” says Crypto Quant in its weekly report.
The report explains that at current price levels, valuation metrics like the Market Value to Realized Value (MVRV) ratio suggest that Bitcoin is still outside the overvalued territory (red area shown in the chart below).
Bitcoin MVRV Ration chart. Source: CryptoQuant
The report explains that Bitcoin could target above $100,000 in the coming weeks as the max band of the Trader On-chain Realized Price shows in the graph below. This max band (red dotted line) was previously reached in March when Bitcoin surpassed $70,000 for the first time.
Bitcoin Trader On-chain Realized Price Bands chart. Source: CryptoQuant
Bitcoin market overheating signals imminent volatile moves ahead
Bitcoin reached a new ATH of $93,265 this week, and the futures market for Bitcoin, particularly with the BTC/USDT pair, has become exceptionally overheated.
The cumulative futures trading volume for BTC/USDT across all major centralized cryptocurrency exchanges has reached $129 billion, with Binance accounting for $50.2 billion.
Generally, when Bitcoin’s derivatives market heats up — especially in the futures segment — alongside a significant price increase, the market may experience heightened volatility. While this can briefly boost demand, it often leads to minor pullbacks and sharp fluctuations. Given the current climate, it would be wise for investors and traders to exercise caution, refrain from rushed speculation, and await a period of price stability before making further moves.
“Market remains extremely leveraged, especially in alts. Heavy leverage buying has pushed perp funding up to 50-100%, especially for alts. The risk of deleveraging may be quite significant.”, says QCP’s report.
It continued, “We believe that the underlying strength in BTC represents a systematic shift in the market in anticipation of Trump’s return to office. His idea of launching a strategic BTC reserve and rotation from Gold to BTC, provides a strong narrative that keeps BTC prices supported.”
Some signs of sell-off
Some BTC investors and miners realized profits following this week’s price rally. According to CryptoQuant, data shows that some large Bitcoin miners have reduced their holdings to take some profits as the price reached new all-time highs.
The Miner Position Index (MPI) allows the tracking of miners movements. MPI measures the amount of Bitcoin flowing out of miners’ wallets relative to the annual average. A high MPI indicates that miners are withdrawing more Bitcoin than usual. When MPI spikes to extreme levels, forming a peak as seen on the graph below, it often signals that Bitcoin’s price may be approaching a cycle top or ready for a dip.
On Tuesday, the metric spiked to 3.56, marking its yearly high. Historical data reveals that when the MPI reached a similar level of 3.87 on November 10, 2023, Bitcoin dropped over 6% within the next four days. If history repeats, BTC could see a similar price movement.
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Bitcoin Miners Position Index chart. Source: Cryptoquant
Additionally, Lookonchain data shows that the government of Bhutan deposited 365 BTC worth $33.31 million to the Binance exchange on Thursday. It currently holds 12,573 BTC valued at $1.15 billion. A whale made a similar move on Friday, depositing 1,920 BTC worth $169 million following a 4,060 BTC deposit this week. If a deposit like this continues or intensifies, it could increase selling pressure, leading to a price dip.
Technical analysis: Is BTC heading to 100K or pullback to 78K?
Bitcoin price reached a new all-time high of $93,265 on Wednesday and declined 3.3% on Thursday. At the time of writing on Friday, BTC recovers slightly and trades around $88,100.
The Relative Strength Index (RSI) momentum indicator stands at 75, well above the overbought level of 70, and points downwards, signaling an increasing risk of a correction. Traders should exercise caution when adding to their long positions, as a move out of the overbought territory by the RSI could provide a clear sign of a pullback.
If BTC faces a corrective pullback, it could decline 10.5% from its current position and retest its $78,807 support level (the 141.4% Fibonacci extension drawn from July’s high of $70,079 to August’s low of $49,000).
BTC/USDT daily chart
Conversely, if the bulls continue the upward momentum, the rally could extend to retest its 241.40% Fibonacci extension level at $99,887.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
