Key Points
- Bitcoin’s momentum ratio indicates three potential scenarios for its next movement.
- A deeper pullback is less likely, given that a correction has already occurred.
Bitcoin [BTC] began May on a bullish note, closing at $97,406. This surge past a crucial resistance level bolsters the bullish argument, especially considering BTC’s prior struggles to maintain above this mark since late February.
The move, however, also carries bearish implications. Bitcoin’s price is currently above the Short-Term Holder (STH) realized price. On the 22nd of April, this shift moved 155-day-old BTC from an underwater position to an unrealized profit state.
Three Potential Scenarios for Bitcoin
Crypto analyst Axel Adler, building on Bitcoin’s momentum ratio, pointed out three possible scenarios for BTC’s next move post the breaking of the critical $97k overhead supply barrier.
If the momentum ratio breaks above 1.0 and sustains, metrics like NUPL and MVRV could signal a fresh upward impulse, potentially propelling Bitcoin’s price into the $150k–$175k range. Conversely, if the ratio dips to 0.75 or lower, STHs may begin cashing out, leading to a potential correction to the $70k–$85k range.
In the third scenario, if the ratio remains within the 0.8-1.0 range, BTC could likely maintain a broad trading range between $90k and $110k. In this case, market participants would hold their positions, but significant new exposure or buying pressure is unlikely to materialize.
Most Likely Next Move for Bitcoin
In the bullish scenario, if Bitcoin’s momentum ratio climbs above 1.0 and sustains, a rally toward the $150k–$175k range could be witnessed, mirroring previous macro cycles.
The MVRV currently stands at 2.16, significantly below the 3.9 threshold typically seen near market tops. This suggests there’s still room before reaching overvaluation. Similarly, NUPL is at 0.54, indicating early-stage optimism. If NUPL heads toward the 0.74 range, it would align with past bull market peaks, suggesting more room for further upside.
However, if sustained buying pressure does not materialize, a base-case scenario of consolidation between $90k–$110k becomes more likely, especially with resistance-driven corrections. Given a correction has already occurred recently, the bullish and consolidation scenarios carry more weight than a deeper pullback.
