Since exiting the low-risk accumulation zone, Bitcoin [BTC]'s 60-day actual market value variance (RCV) has triggered a market reassessment.
Previously, when RCV levels were negative and price momentum was strong, buy signals would become active.
Now, even though the yellow buy flag has disappeared, sell triggers have not yet emerged, as the 30-day momentum remains strong. This transitional state reflects that the market is shifting from the optimal accumulation phase to a more cautious phase.
As of the time of writing, BTC trading price surpassed $109,000, with the market showing bullish momentum, but the continuously rising RCV levels indicate a decrease in the return potential for new bullish entries in the future.
Does the rise in BTC reserves foreshadow sell-offs?
Forex reserves in USD rose by 3.45% to over $273 billion, signaling a potential increase in selling pressure.
The increase in reserves indicates more cryptocurrencies available on exchanges, which typically signals heightened volatility or a market downturn correction. This upward trend often coincides with market participants' readiness to sell holdings at higher prices.
Thus, while momentum remains intact, the increase in reserves may reflect a strategic shift among holders, especially as favorable accumulation conditions wane.
If this trend continues, the likelihood of recent price headwinds on major trading platforms may increase.
Miners and whales reposition, cautious sentiment emerges
The behavior of miners and whales further corroborates the growing cautious sentiment. The miner position index (MPI) has surged over 96%, indicating an increase in outflows from miners, although the value remains slightly negative.
Meanwhile, the proportion of whales on exchanges reflects the continuous influx of funds from top holders into exchanges.
Historically, these dynamics indicate a decline in market confidence among major participants. While it is not yet extreme, these correlated fluctuations may suggest a distribution phase is forming.
Therefore, current market participants should closely monitor wallet flows, especially those from high-impact participants, as they often precede broader trend reversals in Bitcoin's price structure.
Unrealized gains continue to accumulate: will holders profit?
The MVRV ratio of BTC surged 3.88% to 2.32, indicating that most holders currently have substantial unrealized gains.
When this ratio rises above 2, it typically indicates that investors are increasingly inclined to take profits.
Thus, the higher this indicator, the more susceptible the market is to corrections. While it does not confirm an imminent correction, it does indicate that upward movements may face resistance from internal selling pressure.
Traders should remain vigilant, as even slight shifts in sentiment could trigger large-scale sell-offs in an overheated market environment.
Valuation disconnect? Internet usage provides clues
On-chain valuation indicators are showing divergent signals. The NVT ratio has decreased by over 31%, while the NVM ratio has dropped nearly 24%, indicating that trading activity relative to BTC's market capitalization has improved. Typically, this suggests enhanced network efficiency.
However, this decline may also signal that the market valuation exceeds actual usage, creating a subtle imbalance. If this imbalance is not corrected through higher trading throughput, it could challenge current price levels.
Therefore, although surface activity appears positive, the underlying utility trend remains too uncertain to fully confirm complete bullish confidence.
Is BTC heading towards a distribution phase?
BTC remains in a momentum-driven upward trend, but risk signals are beginning to emerge.
The disappearance of buy signals, the increase in forex reserves, the cautious behavior of miners, and the rise in MVRV all indicate a potential turning point.
Although a full distribution mode has not yet been entered, the market is no longer in an accumulation phase.
As Bitcoin's risk-reward situation continues to evolve, traders should now focus on protecting profits, monitoring confirmed sell triggers, and avoiding overexposure.