Reaching an all-time high above $98,000 this week, bitcoin’s (BTC) recent performance has been the talk of the financial market, with many questioning whether the market has reached a peak. CryptoQuant, a leading on-chain and blockchain analytics platform, recently identified five key technical indicators or warning signs to help crypto investors and traders ascertain the possibility of a BTC price correction or further upward momentum.
Below, we explore these indicators and what they could mean for crypto investors and traders.
1. Market Valuation to Realized Valuation Ratio (MVRV)
The Market Value to Realized Value (MVRV) ratio is a technical indicator that measures the market valuation (MV) versus the realized valuation (RV) or capitalization of bitcoin. According to CryptoQuant, historically, an MVRV value exceeding 3.7 has often preceded market tops, signaling that BTC could be overvalued.
In essence, when this threshold is crossed, the risk of a correction increases as profit-taking behavior dominates. Therefore, crypto investors and traders are encouraged to watch BTC’s MVRV ratio closely to gauge overvaluation in the market. Per CoinGlass data, Bitcoin’s MVRV ratio is sitting at 3.08 at the time of writing.
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2. Fear & Greed Index
The Crypto Fear & Greed Index is a popular sentiment analysis tool in the crypto market. At the time of writing, this index is above 80. Notably, when the index exceeds 80, it indicates extreme greed among market participants, a level often followed by price pullbacks.
“Generally, when the index exceeds a value of 80, caution is advised,” CryptoQuant wrote. “While the market can continue to rise during times of high greed, this often signals that a top is near,” it added. Accordingly, crypto investors and traders are advised to exercise caution during this period of high greed, assessing whether the optimism is justified by market fundamentals.
3. New money inflows
Bitcoin’s long-term growth relies on new money flowing into the market. The Realized Cap Growth (365D) metric helps track whether sufficient capital is entering or not.
If new money inflow slows or stagnates, upward momentum could weaken, leaving BTC price vulnerable to corrections, CryptoQuant says. This is especially concerning in scenarios where existing holders start liquidating their positions without fresh buyers stepping in.
Conversely, if new money flow into the crypto market increases, it could mean more upward momentum in BTC price.
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4. Increasing Coin Days Destroyed (CDD)
Among the warning signs identified by CryptoQuant for crypto investors and traders to watch is the Coin Days Destroyed (CDD) metrics which is measured by the activity of long-term BTC holders.
According to the firm, market tops often align with long-term holders (LTH) selling their holdings. When dormant BTC is reactivated, CDD rises, reflecting increased market activity from long-term holders. “Market tops often occur when long-held Bitcoin is reactivated,” the update said.
Notably, CryptoQuant noted that a spike in CDD above 15–20 million could indicate that LTHs are actively cashing out, a potential precursor to a market peak. “Watch for Coin Days Destroyed spiking above 15–20 million as a key signal,” the firm said. At the time of writing, Bitcoin CDD is at 15.1 million.
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5. Inter-exchange Flow Pulse (IFP)
The Inter-exchange Flow Pulse (IFP) is a technical indicator that provides insights into BTC movement between wallets and derivative exchanges. “This flow data reflects market sentiment, with an increase (or decrease) in Bitcoin moving to (or from) derivative exchanges often correlating with bull (or bear) runs,” CryptoQuant stated.
In essence, when more BTC flows into derivative exchanges, it often signals bullish sentiment as traders use the cryptoasset as collateral. Moreover, increased outflow from derivatives exchanges could suggest holders are preparing to sell, driving down prices. Per CryptoQuant’s insights, Bitcoin’s IFP of 730,000 at the time of writing shows bullish momentum for BTC price.
Overall, these metrics provide valuable insights but should be interpreted collectively, not in isolation. While no single indicator guarantees market behavior, combining several indicators could be more effective in analyzing the crypto market.
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Ndianabasi Tom A Petroleum Engineering degree holder, Ndianabasi’s interest since 2018 has been studying the ever-growing field of blockchain and cryptocurrency, keenly evaluating the innovation, exploration, and expansion of this field locally and globally. The founder of Nitadel a media platform, Ndianabasi has been a Writer at Crypto Asset Buyer (CAB) since 2021. When he is not drilling resources in the blockchain and cryptocurrency field, Ndianabasi is singing, reading, watching crime movies, or playing football.
