Bitcoin At A Peak : Key Metrics Suggest Further Gains

As the price of Bitcoin reaches historic highs, and nearly touched $77,000 yesterday on Friday, November 8, 2024, investors are confronted with a crucial question: is this rapid increase supported by real value, or has the market already reached its limits? In a price discovery phase, where traditional benchmarks seem to dissolve, analyses on on-chain metrics provide a better understanding of the underlying potential of the most emblematic crypto. Five key indicators show that, despite this peak, Bitcoin remains fundamentally undervalued.

Indicators that confirm a significant room for growth

The first indication that Bitcoin may still have room to rise comes from the so-called “Rainbow Chart.” According to Lookonchain, this analysis is based on a logarithmic curve that projects the future trends of the crypto. “Bitcoin remains in a phase of moderate valuation,” indicates Lookonchain in its recent analyses. This metric, updated in the Rainbow2023 model, reveals that Bitcoin is still well below its peak projections, suggesting a growth potential for investors with a long-term view.

Another notable indicator is the Relative Strength Index (RSI), currently at 70.83. This index assesses whether an asset is in overbought or oversold territory. For Bitcoin, an RSI around 70.83 shows that, despite its rise, the crypto has not yet reached a level of overheating that would typically characterize a market peak. This data encourages holders to consider long-term positions, supported by an apparent market stability.

Analyses that reinforce Bitcoin’s bullish trend

Other metrics complement this analysis, with the “Cumulative Value Days Destroyed” (CVDD) also indicating a possible undervaluation of Bitcoin. This model is based on the cumulative value of destroyed transactions over time, an approach that allows identifying periods of undervaluation through holding period analysis. Currently, Bitcoin is below the orange line of the CVDD, a threshold historically associated with buying opportunities. “Investors should pay attention to undervalued zones,” specifies Looknode, highlighting the relevance of this data for them.

Additionally, the 2-Year MA Multiplier further strengthens this optimistic view. This model places Bitcoin between red and green trend lines, a positioning that, historically, leaves room for growth before the market begins to reach its limits. As long as Bitcoin does not reach the red line, the bullish potential remains intact according to this model, providing investors with an additional argument to consider a gradual price increase in the coming weeks.

As enthusiasm for Bitcoin continues to grow, these indicators reveal favorable prospects but also call for caution. The volatility remains a fundamental characteristic of this market, and the impact of FOMO (fear of missing out) or FUD (fear, uncertainty, and doubt) could lead to brutal adjustments. While long-term analyses are promising, caution is warranted, especially in a context where collective euphoria can quickly change course.