3 roads lie ahead for Bitcoin – Which one will BTC choose?

• Bitcoin’s momentum ratio outlined three potential eventualities for BTC’s subsequent leg.
• Given {that a} correction has already occurred, a deeper pullback is much less possible.

Bitcoin [BTC] began Might off with bullish momentum, closing at $97,406. 

This breakout above a crucial resistance degree strengthens the bull case, particularly given BTC’s earlier incapacity to maintain above this threshold since late February.

Nevertheless, the transfer additionally introduces bearish implications. Bitcoin’s value now sits above the Short-Term Holder (STH) realized price.

On the twenty second of April, this shift pushed 155-day-old BTC from an underwater place to an unrealized revenue state. 

The STH realized value, now at $93,342, represents the common on-chain price foundation for these holders, establishing a big assist ground for Bitcoin.

So, whereas a brand new all-time excessive seems inside putting distance, anticipating a clean, uninterrupted ascent would nonetheless be untimely.

Three eventualities that might form Bitcoin’s subsequent rally

Constructing on Bitcoin’s momentum ratio, famend crypto analyst Axel Adler highlighted three key scenarios for BTC’s subsequent transfer after breaking the crucial $97k overhead provide barrier.

At press time, BTC’s on-chain momentum sits within the “begin” rally zone, with the momentum ratio at roughly 0.8 (80%). 

This implies the market is positioned for potential upside, however the course will depend upon how the ratio behaves within the coming weeks.

Supply: CryptoQuant

If the momentum ratio breaks above 1.0 and maintains that degree, key metrics like NUPL and MVRV would sign a recent upward impulse, doubtlessly pushing Bitcoin’s value into the $150k–$175k vary. 

Conversely, if the momentum ratio dips to 0.75 or decrease, STHs would begin cashing out, resulting in a possible correction to the $70k–$85k vary.

Within the third situation, if the ratio holds within the 0.8-1.0 vary, BTC will possible keep in a large buying and selling vary between $90k and $110k.

On this situation, market contributors would maintain their positions, however important new publicity or shopping for strain wouldn’t materialize.

BTC’s more than likely subsequent transfer

Within the bullish situation, if Bitcoin’s momentum ratio climbs above 1.0 and sustains, we may see a rally towards the $150k–$175k vary, echoing earlier macro cycles. 

In 2017, Bitcoin surged practically 20x, whereas in 2021, it tripled after breaking prior highs – each cycles marked by NUPL and MVRV ratios coming into euphoric zones. 

At press time, the MVRV sat at 2.16 — properly under the three.9 threshold traditionally seen close to market tops. Therefore, there’s nonetheless headroom earlier than reaching overvaluation.

This means that the present market just isn’t but in a euphoric part.

Supply: Glassnode

Equally, NUPL was holding at 0.54, indicating early-stage optimism. If NUPL pushes towards the 0.74 vary, it will align with previous bull market peaks, suggesting room for additional upside. 

Supply: Glassnode

Nevertheless, if sustained shopping for strain fails to emerge, a base-case situation of consolidation between $90k–$110k turns into extra possible, particularly with resistance-driven corrections. 

That mentioned, given a correction has already performed out not too long ago, the bullish and consolidation eventualities carry extra weight than a deeper pullback.

Control these indicators, as they maintain the important thing to Bitcoin’s subsequent transfer.