Bitcoin (BTC) has just broken its historical high, with trading prices reaching $117,783! Earlier, it even surged to $118,856, with market sentiment being extremely bullish as everyone is optimistic.
However, somewhat unexpectedly, Google Trends data shows that the topic of Bitcoin is not as hot in the U.S. as it once was, and still has a distance to go before reaching the peak of 2020, and even the expected heat in November 2024 is far off.
It seems that the rise of Bitcoin is not solely due to public attention, but rather driven by more 'invisible' forces, possibly institutional funds or larger macro factors coming into play!
Although Bitcoin (BTC) has performed well recently, the enthusiasm in the retail market is far from exploding! According to data from CryptoQuant, spot retail activity has remained low-key, and retail investors' participation enthusiasm has not surged as wildly as in the past.
How to understand this? Simply put, CryptoQuant measures the entry situation of small retail investors by analyzing trading frequency and position size. If these indicators perform poorly, it indicates that retail funds have not surged in large numbers, and the market has not welcomed the anticipated 'retail boom'. In fact, since March 2024, this indicator has not shown significant fluctuations, suggesting that retail investors remain relatively 'calm'.
You might ask, when will this retail surge occur? Referring to past trends, a typical example is February 2021, when retail enthusiasm was overwhelming, and BTC surged to $60,000 in just a few days, but quickly faced pressure and correction, resulting in a strong 'rejection' near $60,000.
This market trend seems more like an 'institution-led' situation, and retail enthusiasm has not fully caught up, indicating that this rise may not have fully transitioned into a 'massive retail speculation'! Therefore, although BTC has been strong recently, retail market participants have not completely followed suit, and whether there will be a 'massive celebration' still depends on the upcoming trends.
Although the Bitcoin market has shown strong performance recently, it has not yet reached the point of overheating! According to CryptoQuant's MVRV ratio analysis, the market sentiment and dynamics are clearly different from previous peaks.
What is the MVRV ratio? Simply put, this ratio is used to measure the gap between the current value of Bitcoin in the market and its historical purchase cost. When this ratio exceeds 2.7, it generally indicates that the market may be overheated, and the price may face the risk of a correction.
In March and December 2024, the MVRV ratio once exceeded 2.7, indicating that the market entered a bubble zone. However, by July 11, the MVRV was hovering around 2.2, which means the current market sentiment is relatively healthy and has not shown signs of excessive speculation.
In other words, although Bitcoin's price has risen significantly, the underlying capital flow and market sentiment have not inflated excessively as in the past. This indicates that the current rise is not a false bubble, but rather a healthier and more robust market recovery.
According to the latest report by CryptoQuant Insights analyst Avocado_onchain, the current sentiment and dynamics of the Bitcoin market are significantly different from previous market peaks, indicating that the market conditions are relatively healthy.
First of all, the MVRV ratio (Market Value to Realized Value Ratio) is a key indicator for measuring whether the market is overheated. In March and December 2024, the MVRV ratio exceeded 2.7, which typically indicates that the market may enter a bubble zone and the risks increase. However, by July 11, the MVRV was hovering around 2.2, indicating that the market is still in a more rational and healthy state without excessive speculation or crazy increases.
Another important clue comes from the UTXO (Unspent Transaction Output) age band, which analyzes how long each Bitcoin has been unused. The data shows that about 15% of the Bitcoin supply belongs to short-term holders (STH), i.e., wallets that have held for less than a month. This is a significant decrease compared to the peak periods of previous market cycles when the proportion of short-term holders was close to 30%.
This change indicates that there are currently more long-term investors holding coins in the market, while the proportion of short-term trading and speculation is low, leading to a more stable market. This is also one of the reasons why Bitcoin has not shown excessive bubbles.
The healthy performance of the Bitcoin market has once again been supported by data! Firstly, the STH SOPR (Short-Term Holder's Profit/Loss Ratio) shows that short-term holders have not made significant profits in the short term. This means that despite the price increase, short-term holders have not sold off massively, resulting in relatively low sell pressure, and the market has maintained a relatively stable state.
Moreover, the behavior of miners is also an important signal. According to the Bitcoin Miner Holding Index, since November 2024, this index has shown a downward trend, indicating that the sell pressure from miners has eased. Mining companies are more inclined to accumulate the Bitcoins they mine rather than sell, which usually means they are optimistic about the future market and believe there is still room for Bitcoin prices to rise.
These data collectively indicate that the market does not show obvious signs of fatigue, nor has there been large-scale profit-taking or selling as in the past, further supporting the view that Bitcoin is still in an upward trend.
Overall, although the market is rising, there are no signs of excessive inflation. The continuous accumulation of coins by miners and the low sell-off activities of short-term holders provide support for the current market stability, indicating that the bull market has not yet ended. Investors still have reasons to be optimistic about Bitcoin's performance in the coming months, and prices may continue to rise.
