Key Points
- Data reveals Bitcoin (BTC) may be undervalued and in an oversold region, hinting at a possible price rebound.
- Despite recent gains, BTC is not yet at the cycle’s low, suggesting potential for further upward movement.
Bitcoin’s recent price increase of 2.57% in the last 24 hours has not been fully backed by market momentum, which fell by 23.23% in the same period.
Historical trends suggest that there is potential for further growth, meaning that Bitcoin (BTC) could reach a new all-time high in the coming weeks.
An ‘Undervalued’ Position
CryptoQuant’s Market Position and Supply Pressure metrics suggest that BTC may be undervalued, based on the Margin of Safety (MoS) and Market Sentiment Ratio (MSR) indicators.
The MoS, which assesses whether BTC is overvalued or oversold relative to a baseline, is currently trending below the baseline, implying that BTC is in an oversold position.
Similarly, the MSR, which measures market sentiment, is below the yearly Simple Moving Average (SMA), indicating a pessimistic sentiment.
Historically, when the MoS is below the baseline and the MSR is below the yearly SMA, these conditions signify a strong buying opportunity, often followed by significant BTC rallies.
The current market pattern suggests that BTC might be preparing for an uptrend.
Far from the Market Top?
According to Glassnode’s Total Supply of Bitcoin in Profit, BTC has not yet reached its market top.
If BTC were to touch the red trendline, it would mean most holders are in profit, which has historically triggered major market sell-offs.
Currently, BTC is well above this trendline, suggesting a favorable position for further rallying.
Data on exchange netflows shows a consistent decline since 12 January, indicating reduced selling pressure as more investors move their BTC into private wallets.
If the exchange netflow turns negative, it would mean that spot traders are increasingly confident, a sentiment that typically correlates with a higher BTC price.
In summary, BTC appears to be in a strong position to continue its upward rally, supported by decreasing selling pressure and increasing market confidence.
