Bitcoin's Supply Compression Determines Potential Value: $150K or $105K
In the world of cryptocurrency, Bitcoin has been experiencing a series of significant developments.
The NVT ratio, a key indicator of capital rotation within the Bitcoin network, has declined by over 4% to around 31, signalling reduced capital rotation. This decrease could signal caution among investors about overvaluation risks if on-chain activity fails to recover.
The spot Taker CVD shows sellers remain dominant in Bitcoin market flows, adding to the bearish sentiment. However, the central question remains whether Bitcoin can transform the current supply squeeze into a sustainable push toward $150K.
Sustaining above $111K could prevent a deeper slide toward $105K, a level that has proven to be a significant support in the past. The Stock-to-Flow ratio, often driving long-term valuations upward, has surged 100% higher, reaching 3.18 million, underscoring Bitcoin's enduring scarcity.
Scarcity of Bitcoin, indicated by compressed liquid reserves, strengthens upward pressure. Historically, scarcity has fuelled recovery phases in Bitcoin's market, providing the backbone for bullish narratives, even during corrections. Any sudden reduction in selling could trigger outsized rallies due to scarcity-driven rebounds in Bitcoin.
However, the market's ability to absorb volatility will determine if Bitcoin can reach $150K or if it will trigger a correction. Volatility has spiked in Bitcoin market, and the NVT ratio, currently hovering within a historically neutral band, leaves room for renewed network strength if usage rebounds.
Bitcoin's price has retraced to the $110K-$112K zone, a level that still shows strong demand remaining intact above $107K. Despite this, Bitcoin recently failed to reclaim the $118.5K resistance.
While short-term indicators suggest fragility, the long horizon still leans positive due to Bitcoin's scarcity. The largest Bitcoin whale investors, though mostly anonymous, can significantly influence Bitcoin prices and market trends. These include early adopters, institutional investors, and entities controlling large wallets with thousands of BTC.
The MACD signals weakening momentum for Bitcoin, adding to the uncertainty in the market. The decline in the NVT ratio reflects weaker organic demand, another factor that could influence Bitcoin's future trajectory.
As the market navigates these challenges, the future of Bitcoin remains uncertain. Whether it will break through the $150K barrier or see a correction will depend on various factors, including market volatility, investor sentiment, and the ability of the network to absorb fluctuations.
Read also:
- Understanding Hemorrhagic Gastroenteritis: Key Facts
- Stopping Osteoporosis Treatment: Timeline Considerations
- Trump's Policies: Tariffs, AI, Surveillance, and Possible Martial Law
- Expanded Community Health Involvement by CK Birla Hospitals, Jaipur, Maintained Through Consistent Outreach Programs Across Rajasthan
