Bitcoin has risen over 40% this month, reaching a new record price of $66,879 on expectations that the recently listed ProShares exchange-traded fund (ETF) tied to the cryptocurrency’s futures would bring more mainstream money into the market.

Such a steep ascent often has investors assessing whether the party is coming to a close, especially when popular technical indicators like the relative strength index (RSI) signal overbought conditions, as with bitcoin.

However, blockchain metrics like the MVRV Z-score and a lesser-known chart-based indicator, Mayer Multiple, suggest the bull run has plenty of steam left.

Bitcoin

The market value-to-realized value (MVRV) Z-score that measures the deviation of market value from realized value and is used to assess undervalued and overvalued conditions, has doubled to 3.91 this month. However, the value is nowhere close to the red zone above 5.00 that has historically marked the final leg of the bull market.

The market value represents the total network value of the cryptocurrency and is calculated by multiplying the total circulating supply by the last traded price. Meanwhile, the realized value is calculated by valuing each coin at the price it was last moved.

Although bitcoin market valuations may not be cheap, they do not appear to be overstretched either, with there being scope for an extension of the price rally.

“When market value is significantly higher than realized value, it has historically indicated a market top (red zone), while the opposite has indicated market bottoms (green zone),” blockchain analytics firm Glassnode said in the MVRV Z-score explainer.

The Mayer Multiple, which measures the spread between bitcoin’s price and the 200-day moving average (MA), also shows the bull market is still far from peaking. While the metric has risen to a five-month high of 1.39, it is well below the 2.4 thresholds, above which previous bull markets peaked.

Bitcoin

Both indicators back up analysts’ expectations of a continued price rally toward $100,000 in the coming months. That said, it may not be a smooth ride, and the cryptocurrency may see price pullbacks depending on the degree of leverage in the market.

The cryptocurrency remains vulnerable to macro risks and potential risk-off in traditional markets.

According to Reuters, there is a growing view in the market that the U.S. Federal Reserve may soon feel compelled to scale back stimulus more aggressively to contain inflation. “U.S. traders are now pricing a full rate hike into the Fed’s September policy meeting next year. But by that time, New Zealand’s central bank would have hiked five times, Canada’s three times and England’s four times,” Bloomberg report said.

Should the market start pricing more aggressive Fed rate hike bets, risk assets, including bitcoin, may face some selling pressure.


All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by CoinDesk constitutes an investment recommendation, nor should any data or Content published by CoinDesk be relied upon for any investment activities. CoinDesk strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP