Bitcoin (BTC) Price Analysis and Market Insights

Bitcoin price showed a 2.1% gain on Thursday, rising from its last closing price and trading at $99,100. While Thursday's price movements will largely depend on the US retail sales data for December, Bitcoin’s price path could face further disruptions.

However, high hopes for better crypto regulations follow President Trump’s re-election. His administration aims to build a strong Bitcoin reserve and promote pro-crypto laws. This approach boosts investor confidence.

Market sentiment shifts after the core December consumer price index shows cooler-than-expected results. Following this data release, fed funds futures traders now see a 50% chance of two 25 basis-point rate cuts by the Federal Reserve by year-end, up from 40 percent the day before.

As President-elect Trump prepares to return to the Oval Office on January 20, crypto enthusiasts are excited. They expect a friendlier approach to digital assets. Trump has promised to establish a strategic Bitcoin reserve for the US. He also plans to appoint former SEC Commissioner Paul Atkins as head of the securities regulator.

Many on-chain metrics suggest Bitcoin’s price hasn’t peaked yet, which indicates potential for growth in the broader market. Analysts at 21Shares, a crypto asset manager, emphasize the importance of ‘on-chain analysis.’ This method directly examines data from blockchain networks and offers valuable insights into market trends and investor behavior.

Market observers frequently analyze Bitcoin’s performance within its historical four-year cycles. These cycles are characterized by four distinct phases: breakout, hype, correction, and accumulation, each shaping the cryptocurrency’s long-term trajectory. With a mix of technical indicators, regulatory developments, and macroeconomic factors, Bitcoin remains a focal point for traders navigating the evolving crypto landscape.

Insights from MVRV Z-Score Analysis

The Market Value to Realized Value Z-score (MVRV Z-score) shows how a cryptocurrency’s market value compares to its realized value. The realized value is the total worth of all coins based on their last transaction price. Analysts at 21Shares suggest using standard deviations to express this Z-score. This approach helps measure market cycles and sentiment.

On the historical side, an MVRV Z-score above 7 is a market peak indicator, and a value below 0 might point toward a possible bottom. The MVRV Z-score for bitcoin currently ranges between 2.5 and 3. From the analysts’ view, this is a potential local top. Yet, this figure is still far below the critical threshold of 7 associated with major market cycle tops.

According to the analysts, Bitcoin would need to increase to more than $200,000 to push the MVRV Z score to 7 while the realized price stays flat. Positive values of the metric mean the broader market is in profit; negative values mean this is a collective loss.

When Bitcoin recently seemed to hit the $100,000 mark, the net unrealized profit loss ratio was around 0.5 to 0.75. However, the report noted that the sentiment level is at this level, and it has not crossed above the 0.75 barrier, which would indicate market euphoria or greed and can sometimes be a top indicator.

Last weekend and earlier this week, bitcoin’s price drop was mainly due to short-term holders. These bears have held the crypto coin for less than 155 days. Analysts believe that long-term holders influence price movements during major market shifts.

It shows the need to monitor long-term holders in real-time. A small amount of their selling can tip Bitcoin’s price.

Bitcoin Price Analysis

Moving averages show inconsistent signals in Bitcoin’s price patterns. Given the current price is below the 10-day Simple Moving Average (SMA), which is roughly $99,683, a minor bearish trend is reflected. However, the 50-day SMA, at about $97,502, shows a positive picture given the current price surpasses this average. Comparably, the 200-day SMA, positioned close to $95,038, supports a long-term positive trend even more.

The 14-day RSI at 68.52 indicates that Bitcoin is almost overbought, so the Relative Strength Index (RSI) offers another study level. As the RSI approaches 70, it could suggest a slight pullback or a forthcoming price consolidation.

Important support and resistance levels signal important pricing points to watch. At $92,000, a noteworthy level that should be exceeded, immediate support is identified. This might cause a fall toward $74,000. Conversely, psychological resistance falls at $100,000; more resistance follows nearly $106,000.

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