“Is Bitcoin’s $93K Surge About to Crash? Key Warning Signs Investors Can’t Ignore!”

Bitcoin continues to dominate the cryptocurrency market, with its price soaring by 19.16% over the past week, according to CoinMarketCap. The flagship crypto asset reached a new all-time high of $93,434 on Wednesday, further solidifying its position as the market leader. As the year progresses, the possibility of Bitcoin reaching six figures by year-end seems more likely than ever.

But with euphoria surrounding this surge, some analysts are starting to caution about potential profit-taking and market corrections.

In this post, we explore the insights shared by Amr Taha, a CryptoQuant analyst, who believes that Bitcoin may be entering a “profit-taking zone”—suggesting that a price correction could be imminent.

Bitcoin’s Meteoric Rise and What Comes Next

In a Quicktake post on Friday, Amr Taha stated many investors may be preparing for a cash-out as the Bitcoin MVRV ratio reached 2.64. Generally, the Market Value to Realized Value is a trading indicator used to measure whether an asset is overvalued or undervalued or to identify market tops or bottoms.

Amr Taha explains that a Bitcoin MVRV ratio above 2 indicates that investors currently hold significant amounts of unrealized gains and are likely to commence profit-taking. However, historical data from late 2021 and early 2022, shows that profit-taking occurs as the Bitcoin MVRV ratio moves into a range of 2.5-3.5, and is accompanied by significant corrections.

Following the Bitcoin price surge over the past few weeks, an MVRV ratio of 2.64 presents substantial potential for a major price correction, despite the minor price drops in the past few days. This sentiment is further backed by the asset’s relative strength index (RSI), which remains in the overbought zone.

However, Ama Taha further explains that Bitcoin may sometimes only form a major market top when the MVRV ratio reaches as high as 4. Therefore, at 2.64, the premier cryptocurrency may still sustain its current upward price trajectory, if bullish market momentum persists. The analyst advises that investors monitor the MVRV ratio as a rise towards 3 would signal the potential for further price gains while a decline to a range of 1.5-2 indicates a local market top is forming.

Short-Term Holders Realized Cap Hits $30 Billion

In addition to Bitcoin’s alarming MVRV ratio, Taha also noted that short-term holders have now accumulated a realized market cap of over $30 billion, a level last observed in March 2024. The CryptoQuant analyst stated Bitcoin has historically undergone significant price corrections whenever the STH realized cap reached similar levels, signaling another warning for investors of a potential price dip.

At the time of writing, Bitcoin is trading at $91,738 with a 3.97% gain in the past 24 hours. However, the asset’s trading volume is down by 7.42% and is valued at $80.73 billion.

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