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Bitcoin (BTC) Could Continue To Climb Before It Enters the Overbought Zone.

February 18, 2021


Talking Points:

● BTC has climbed to a new record high of 52,800 USD.

● Major investors warn of a likely correction, while whales continue to buy up BTC.

● As BTC’s supply on exchanges is being reduced, the downside likelihood is also being reduced.

After a return of over 80% this year, some experts warn that BTC is approaching the overbought zone. However, one on-chain metric suggests that BTC is ready for another huge surge.

Market Value Up By 60%

BTC’s market value has climbed by almost 60% since the start of the month. BTC was able to hit a new record high of 52,800 USD as a new wave of investors enters the market.

Over 20,000 new addresses have joined BTC’s network every day over the last five weeks, representing a spike in user take-up. It appears that Tesla’s 1.5 billion USD investment put BTC in the headlines.

BTC Looks “Unsustainable”.

Regardless of the gains witnessed by BTC over the past month, some experts believe that a huge correction is underway.

One expert said that BTC “looks unsustainable” at its current levels. saying that an inelastic supply of BTC led to a price premium for both “real money” and “speculative” investors, while retail interest dwarfing the institutional inflows.

For this reason, the experts anticipate that the volatility will need to decrease to maintain the recent upswing.

Plenty of Room to Climb.

Despite the worst-case scenario, BTC fundamentally looks strong. With whales entering a buying frenzy, reducing the amount of BTC available on exchanges. Market behaviour of this kind reduces the selling pressure behind the coin, consequently capping its downside potential.

BTC Balance on Exchanges:

In addition, the MVRV Z-Score is supporting this sentiment suggesting that BTC has plenty of room to climb before it reaches the overbought zone. This fundamental metric represents the ratio difference between BTC’s market capitalisation and realised capitalisation and the standard deviation of market capitalisation.

Every time this on-chain index rose over the value of 9 in the last ten years, it indicated a sell signal leading to a sharp correction.

BTC MVRV Z-Score:

Currently, BTC is trading at a new record high and with the MVRV Z-Score hovering at a value of 6.60. If this metric is as accurate as it has been in the past, then BTC could climb by 10,000 USD or 20,000 USD before the market sees a correction
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