In today's market, we can easily find dozens of indicators used to judge whether a bull market has peaked. However, in the current situation, almost all popular indicators have not yet shown signs of overheating. But we cannot conclude that indicators are not overheating, and thus buying long is safe.
Taking the commonly used MVRV indicator in the market as an example, the position of each small black circle often represents a relatively high level, and the corresponding yellow Bitcoin price usually marks the peak of the bull market.
However, in reality, analysts often overlook the position of the small red circles in the chart. From the labeling in the chart, the positions of these small red circles are not that high, even lower than the current position, yet Bitcoin has still experienced multiple epic 50% to 70% corrections.
I am not saying that a major correction similar to the previous small red circles will occur next, but rather highlighting the blind spots that exist in the market.
If one chooses to enter the market simply because there are no signs of overheating yet, then at this point, assets may also face the risk of being halved and then halved again.
Back to the market, Bitcoin is currently severely lacking in upward momentum. Besides the continuous outflow of ETFs and the fundraising difficulties of MicroStrategy, the Bitcoin strategic reserve bill is not what the market expects. The market situation can be seen from the USDT.D market share.
This is the weekly K-line chart of USDT.D, with the purple line representing the price trend of Bitcoin. From the chart, it can be seen that when the weekly K-line drops sharply from above, it often drives Bitcoin to rise significantly, which reflects the manifestation of momentum. In other words, when USDT.D is at a high level, liquidity in the market is ample, and everyone has more capital to invest, which is beneficial for driving up the price of Bitcoin.
However, observing the position of the current weekly K-line, it is difficult to drive Bitcoin into another major bull market at such a low level. This also means that the virtual coins held by market participants are close to being fully allocated, while the USDT available for additional investment is pitifully low.
Therefore, the most ideal development trend at present is for the market capitalization of USDT.D to gradually recover with market fluctuations or declines, reaching a relatively high level, such as recovering to 6% to 7%. This way, the market will have more capital strength for additional investment.
If USDT.D suddenly drops to push up Bitcoin prices at this time, then the upward trend of Bitcoin will be difficult to sustain and will likely fall again in a short time.
#Market analysis for reference only #Not investment advice