Bitcoin

when

Bubble

Although Bitcoin’s price is yet to reclaim its March all-time high, an analyst claims two key metrics show that the bull market remains strong and steady with no signs of a deep correction.
In an Aug. 18 <a data-ct-non-breakable="null" href="https://adlerscryptoinsights.substack.com/p/insight-5" rel="null" target="null" text="null">report</a>, CryptoQuant researcher Axel Adler looked to two key metrics — the bubble vs. crush market structure and the ratio between the difference of market cap and realized cap and the standard deviation of market cap (MVRV-Z score) — as signals that Bitcoin’s current price action is tracking a healthy path forward.&nbsp;
“We can see that the current bull cycle is developing quite steadily without significant anomalies or sharp jumps,” Adler added.
<h3 id="bitcoin-s-bubble-vs-crush-market-structure-score-indicates-no-bubble">Bitcoin’s bubble vs. crush market structure score indicates no bubble</h3>
Adler highlighted that the bubble vs. crush market structure has dropped to a score of 1.02, which he considers “the baseline,” suggesting that Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="null" target="null" text="null">BTC</a>) is not currently experiencing a bubble.
Bubbles form in the market when Bitcoin’s market capitalization “grows faster” than its realized capitalization. When <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-price-new-73-6-k-all-time-high-etfs-eat#:~:text=Data%20from%20Cointelegraph%20Markets%20Pro,dip%20before%20abruptly%20heading%20higher." rel="null" target="null" text="null">Bitcoin hit its all-time high of $73,679</a>, the indicator was signaling a bubble, with a score of around 1.5.
Less than a week later, the price plummeted 16% to $61,930, <a data-ct-non-breakable="null" href="https://coinmarketcap.com/currencies/bitcoin/" rel="nofollow noopener" target="_blank" text="null">according</a> to CoinMarketCap data.
<figure>
 <img alt="2 key Bitcoin metrics signal steady bull cycle — ‘No bubble’ in sight" name="" src="https://s3.cointelegraph.com/uploads/2024-08/Screen%20Shot%202024-08-21%20at%2011.02.36%20am">
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 Bitcoin is down 2.53% over the past seven days. Source: CoinMarketCap
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Bitcoin is still struggling to hold onto the key $60,000 level that traders have been looking to as a pivotal point in recent times. Since July 22, Bitcoin has been trading in a 40% range, oscillating between a low of $49,842 and a high of $69,799.
At the time of publication, Bitcoin is trading at $59,236.&nbsp;
Adler also noted that Bitcoin’s 30-day moving average (MA) MVRV-Z score is at 1.8, slightly over BTC’s annual average of 1.6, which suggests “minimal overvaluation.”&nbsp;
When the 30-day MA MVRV Z-score surges, it can be an indicator to traders that the asset is overvalued and a price correction may be coming.&nbsp;
In March 2021, Bitcoin’s 30-day MA MVRV-Z score reached above five before Bitcoin reached a high of $60,701. But, just three months later BTC declined 45% to $32,827 by July.
Both bubble vs. crush and the MVRV-Z score are metrics used to gauge whether or not Bitcoin could be considered “overvalued.”
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-buyers-wait-below-58k-japan-wipes-record-stocks-crash" rel="null" target="null" text="null">Bitcoin buyers wait below $58K as Japan wipes out record stocks crash</a>
“As long as the metric does not reach extreme levels that could signal a significant risk of correction, the market can be considered bullish,” Adler added.
Several traders have been commenting on <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/how-long-will-the-bitcoin-consolidation-last" rel="null" target="null" text="null">Bitcoin’s extended consolidation in recent times</a>.&nbsp;
“We are in the boring phase. This phase happens before and after the halving,” pseudonymous crypto trader Ash Crypto wrote in an Aug. 20 X <a data-ct-non-breakable="null" href="https://x.com/Ashcryptoreal/status/1825825144666796186" rel="null" target="null" text="null">post</a>.
Meanwhile, pseudonymous crypto trader Rekt Capital <a data-ct-non-breakable="null" href="https://x.com/rektcapital/status/1825823150128480478" rel="null" target="null" text="null">added</a> that Bitcoin is “on the cusp of reclaiming its Post-Halving ReAccumulation Range,” suggesting that Bitcoin could move higher in the coming months.&nbsp;
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/11-critical-moments-ethereum-history-that-made-eth-no2-blockchain/" rel="null" target="null" text="null">11 critical moments in Ethereum’s history that made it the No.2 blockchain</a>
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

2 key Bitcoin metrics signal steady bull cycle — ‘No bubble’ in sight

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