Why buying Bitcoin at $50K may be a wrong move

• The 30-day MVRV ratio suggests a looming correction for BTC.
• Open Curiosity climbed to its highest in over two years as Bitcoin eyed $52,000.

In case you are planning on shopping for Bitcoin [BTC]  for fast positive factors as a result of the worth hit $50,000, then you definately may need to offer it one other thought. Effectively, one can argue that the sentiment across the market was bullish. However historical past, as AMBCrypto confirmed, revealed that we would not but be in an “up solely” state of affairs for the coin.

Earlier than we arrived at this conclusion, we analyzed Bitcoin’s Market Worth to Realized Worth (MVRV) ratio. We additionally evaluated the way it pertains to the worth motion. When the MVRV ratio is excessive, it means that the market worth of Bitcoin has surpassed the typical worth at which cash final moved.

Maintain on! The coast shouldn’t be but clear

If so, BTC might be thought of overvalued. Then again, a low MVRV ratio means that the coin is undervalued. At press time, AMBCrypto’s analysis of Santiment confirmed that the 30-day MVRV ratio was 14.31%.

Supply: Santiment

Traditionally, every time the metric rises as excessive as this, BTC corrects afterward. Subsequently, this enhance might be a warning sign that the coin value would possibly drop considerably over the approaching days.

As of this writing, Bitcoin’s value was $50,105. This worth represents a 17.83% enhance within the final seven days.

With the worth restoration, one can assume that the liquidity flush post-ETF approval might be over. Regardless of the worth prediction, investor curiosity in Bitcoin has been hovering. Proof of this might be discovered within the Open Curiosity (OI). The OI is the overall quantity of open futures contracts.

At press time, Glassnode’s knowledge confirmed that Bitcoin’s OI was over $19 billion. This represents the very best worth seen for over two years.

Supply: Glassnode

Purchase now, wail later, or wait now, purchase later

The OI enhance means that patrons have been extra aggressive out there whereas sellers have taken a backseat. Ought to the OI proceed to extend alongside the worth motion, BTC would possibly head towards $52,000. But when the aggression subsides, Bitcoin’s value would possibly dump into the important thing assist simply earlier than it begins one other rally.

From a buying and selling perspective, the Exponential Transferring Common (EMA) confirmed a bullish bias for BTC.

As of this writing,  the 20 EMA (blue) had crossed over the 50 EMA (yellow). Likewise, the 50 EMA had crossed over the 200 EMA (cyan). Crossovers like these recommend that Bitcoin would possibly keep bullish whether or not within the quick time period or not.

BTC had additionally damaged above all three EMAs, indicating {that a} robust resistance was not but forward. Nevertheless, the Relative Energy Index (RSI) indicated that the coin was overbought for the reason that studying crossed 70.00.

The Cash Movement Index (MFI) additionally rose previous 80.00, suggesting the identical situation because the RSI.

Supply: TradingView

Learn Bitcoin’s [BTC] Value Prediction 2024-2025

Whereas this infers intense shopping for stress, it may additionally result in a pullback for the coin. Ought to BTC retrace, the worth would possibly fall to the $46,000 to $48,000 area. In the long run, this would possibly function one other shopping for alternative.

However market gamers who need short-term positive factors would possibly want to attend for extra correction as profit-taking can seem at any cut-off date.