On-Chain Data Shows Bitcoin Rally Has Yet to Enter “Overheated” Territory
- Bitcoin’s rally has been heating up as of late, with bulls taking full control of its price action as they sent its price rocketing past its previous all-time highs overnight
- This rally didn’t last for too long, as an influx of selling pressure around $36,000 slowed its ascent and caused it to reel towards $34,000
- It has been consolidating around this price level ever since, and it remains unclear as to whether it will see an extended consolidation phase here or if it will regain its momentum
- One on-chain analyst explained in a recent tweet that a reliable indicator shows that although Bitcoin’s rally is warming up, it still has a long way to go before it enters “overheated” territory
Bitcoin has been creating massive tailwinds for the entire crypto market over the past few days and weeks, with its uptrend’s strength showing few signs of wavering.
One on-chain analyst explained in a recent tweet that he is now watching for signs of exhaustion with BTC’s current rally, but it is not showing any so far.
He notes that, compared to past parabolic uptrends, this one is only in “warm” territory according to one indicator, which means it has a way to go before it grows overheated.
Bitcoin Rallies to All-Time Highs as Bulls Eye Upside
At the time of writing, Bitcoin is trading up just over 3% at its current price of $35,000. This marks a massive surge from its recent $30,000 lows set just a few days ago.
Last night, the crypto surged to fresh all-time highs of $36,000, and it appears to be gunning for a retest of these highs.
A break above here could place the cryptocurrency into a full-fledged parabolic upswing that leads it past $40,000.
Data Suggests BTC Rally Not Even Close to Being Finished
One analyst explained in a recent tweet that Bitcoin’s rally has yet to reach levels where it is over-extended, noting that a historical analysis indicates that it is only in its early phases.
“This rally is warm but not yet overheated. This is how much ‘speculative premium’ we have right now compared to a similar phases of the prior 2 bull markets.”
Image Courtesy of Willy Woo. Source: Woonomics.
Combine this historical precedent with the fact that institutional inflows are fueling Bitcoin’s uptrend, and it does seem like there’s a strong possibility that serious upside is imminent.
Featured image from Unsplash. Charts from TradingView.