- Analysts believe that BTC may be on the cusp of a major rally, citing historical on-chain indicators.
- However, profit taking continues to exert downward pressure, limiting immediate gains.
Bitcoin [BTC] has delivered an impressive performance, posting a monthly gain of 46.59% and increasing its market cap to $1.94 trillion.
Yet momentum has waned and there is no clear market direction yet. Over the past 24 hours, the BTC price has risen by 0.80%, putting it in a consolidation phase.
AMBCrypto’s analysis suggests that while BTC has a range-bound price, history shows that it tends to break higher once market sentiment improves.
BTC still has room for a rally
According to one chart shared by Alex Adler Jr. Bitcoin has yet to reach its cyclical peak.
The chart examines BTC’s performance using the Simple Moving Average (SMA) Multiplier, a tool designed to track price trends across market cycles.
The analysis uses color-coded zones – ranging from green (beginning of the cycle) to black (top of the cycle) – to depict Bitcoin market sentiment during different phases, from accumulation to peak speculation.
In his message, Adler stated:
“The orange dot has arrived. Red, purple, blue, navy and black are coming.”
Source:
This means that BTC is still far from the peak of its cycle, with five more phases ahead. Historically, these phases follow a predictable pattern, with the final “black” phase marking the beginning of a decline.
If this pattern holds, BTC could surpass the long-awaited $100,000 target that has captured the market’s attention.
AMBCrypto explored additional insights into why, despite these promising numbers, Bitcoin has yet to fully realize its rally.
Profit-taking slows BTC’s rally
CryptoQuant’s final insight reveals that increased profit-taking activity is weighing on Bitcoin’s (BTC) price momentum, preventing it from making significant upward moves.
The Adjusted Spent Output Profit Ratio (aSOPR), which measures whether investors sell their BTC shares at a profit or loss, stood at 1.049 at the time of writing.
A value above 1 indicates that investors sold at a profit, and this has put pressure on the price of BTC, slowing the rally.
Source: Coinglass
Furthermore, the Take Buy/Sell Ratio, an indicator of whether buyers or sellers dominate the market, stood at 0.963 at the time of writing.
This suggests that the selling volume is greater than the buying volume, further slowing BTC’s upward movement.
Investors ensure that BTC does not fall
CryptoQuant reports that US investors have been actively buying Bitcoin (BTC) in recent days.
The Coinbase Premium Index, which measures the price difference between BTC on Coinbase and Binance, has moved higher to 0.1308. This is close to the November high of 0.1384.
Source: Coinglass
Read Bitcoin’s [BTC] Price forecast 2024–2025
A positive reading of this index – above zero – indicates stronger buying activity from US investors compared to other markets.
This increased demand has helped stabilize the price of BTC and prevent further declines.
