As the Bitcoin market continues to navigate uncertain waters, a new report from blockchain analytics platform Coinglass reveals that several critical bull market indicators are flashing warning signs. The data suggests that more than half of the monitored signals are inching closer to selling thresholds that have historically indicated overheated market conditions.
As of today, September 29, 2023, 18 out of 30 indicators tracked on Coinglass’s Bull Market Peak Signals dashboard have crossed the 50% mark in their journey towards triggering potential sell signals. Notably, six of those indicators are already above 80%, highlighting the growing concern within the crypto trading community regarding possible market saturation.
Despite the troubling trends, none of these indicators have reached the critical 100% mark that traditionally signals a sell-off. However, with a significant number already past the halfway point, analysts warn that a simultaneous spike could catch traders off guard, prompting a surge of fear, uncertainty, and doubt (FUD) across the market.
In a recent research overview, analysts from Glassnode pointed out signs of fatigue in Bitcoin’s price momentum following a brief post-September Federal Reserve meeting rally. They flagged a crucial short-term holder cost basis set at $111,000, emphasizing that maintaining this level is vital to prevent a deeper market correction.
However, the overall demand from institutional investors and crypto holders remains a point of concern. Analysts speculate that if buying activity does not resurge, the mechanism for a deeper market cooldown will stay potent. Recent data from SoSoValue highlighted substantial net outflows in spot Bitcoin ETFs, exceeding $900 million last week, marking this as the third-largest weekly outflow recorded this year.
The Coinglass dashboard compiles an array of market metrics, merging price indicators like the Pi Cycle Top and Golden Ratio Multiplier with on-chain profitability statistics such as MVRV and Bitcoin’s net unrealized profit/loss (NUPL). Supply dynamics, including long-term holder wallets and Bitcoin’s market dominance, also play a crucial role in this analysis.
Current metrics indicate that Bitcoin’s dominance is nearing 89% of its cycle top threshold, while long-term holder supply approaches 87% of its own trigger point. Additionally, the widely acknowledged Crypto Bitcoin Bull Run Index stands at 75 out of a possible 90 points, highlighting its measure of completion is over 83%.
This convergence of signals is particularly notable following Bitcoin’s peak at $124,128 in August 2023, raising questions about whether the market has already reached its zenith for this cycle. A survey by CoinGecko earlier this month found that over half of participants do not foresee Bitcoin breaching the $150,000 mark before the year’s end, with 13% of respondents believing that Bitcoin has already peaked for the year and will not achieve new heights until 2024.
The combination of these indicators and market sentiments underscores the current atmosphere of trepidation among Bitcoin investors as they weigh their positions in an environment ripe with potential volatility.
