Bitcoin network activity hits 1-year low – Is BTC overvalued at $98K?

• Bitcoin’s value surged previous $98K, however declining community exercise raises issues about overvaluation. 
• Bitcoin’s value rally to $98K clashed with weakening community fundamentals. 

Bitcoin’s[BTC] value has declined after its surge over $100,000, lately touching $98K. Whereas this value vary excites buyers, underlying on-chain information presents a contrasting narrative.

Community exercise has hit a one-year low, elevating issues about whether or not present value ranges are justified.

AMBCrypto assesses if fundamentals again Bitcoin’s rally by evaluating key valuation metrics like Metcalfe’s legislation and the Market Worth to Realized Worth (MVRV) ratio. This analysis will decide if a correction is imminent.

Bitcoin’s valuation and community exercise: A rising disconnect?

Bitcoin lately declined to $98K, down from the six-figure mark. Nonetheless, a better have a look at community exercise suggests the cryptocurrency is likely to be overvalued at present ranges.

Based on Metcalfe’s legislation, which values a community primarily based on the variety of energetic customers, Bitcoin’s truthful worth falls between $48K and $95K.

With BTC buying and selling above this vary, issues about sustainability come up.

Supply: CryptoQuant

The Metcalfe Valuation Bands, which have traditionally guided Bitcoin’s value, point out a possible deviation. Since February 2024, Bitcoin has largely remained between the pink ($48K) and blue ($95K) valuation bands.

The present value exceeding this vary suggests a speculative premium, probably fueled by exterior components like ETF inflows or macroeconomic optimism.

Community exercise declining – A warning signal?

A deeper dive into Bitcoin’s community fundamentals reveals a decline in day by day energetic addresses, a metric for consumer exercise.

The drop in energetic addresses aligns with the downward development in Metcalfe valuation bands since March 2024, reflecting decreased on-chain engagement.

This development means that the underlying community fundamentals don’t totally help the present valuation regardless of Bitcoin’s value rally.

Supply: Glassnode

The Market Value to Realized Value (MVRV) ratio additional reinforces this concern. Traditionally, an MVRV above 2.4 has preceded corrections, and the current downtrend on this metric signifies potential overvaluation.

The hole between market value and realized worth suggests buyers could also be holding unrealized positive aspects, rising the chance of profit-taking.

Technical indicators – The place is BTC headed?

From a technical perspective, Bitcoin maintained a bullish construction however confirmed indicators of exhaustion.

The value is at present hovering close to the 50-day Shifting Common (MA) at $98,710, whereas momentum indicators recommend a slowdown.

If Bitcoin fails to carry above this stage, a pullback towards the $95K area is feasible, aligning with the higher Metcalfe valuation band.

Nonetheless, Bitcoin might goal psychological resistance at $100K if bullish momentum persists.

The 200-day MA stays far beneath present ranges, indicating sturdy long-term help, however short-term overbought circumstances can’t be ignored.

Correction or consolidation?

With community exercise at a one-year low and value exceeding truthful worth estimates, Bitcoin seems overextended.

Whereas exterior components like institutional demand and macro developments might maintain its rally, on-chain fundamentals paint a extra cautious image. Buyers ought to intently monitor community development and key help ranges to gauge Bitcoin’s subsequent transfer.

– Learn Bitcoin (BTC) Value Prediction 2025-26

If Bitcoin can not maintain momentum above $98K, a wholesome correction towards the $95K-$90K vary might present a greater re-entry level.

However, if BTC reclaims community exercise development, the rally might resume, defying basic issues.