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On-chain Metrics Suggest Bitcoin Rally Has More Room to Run
Bitcoin continues to hover near its historical highs, captivating the attention of the cryptocurrency community. According to newly released on-chain analytics, Bitcoin may still see a significant climb before short-term holders decide to cash in their profits — potentially pushing the leading cryptocurrency up another 20% to 25% from current levels.
Market Value to Realized Value (MVRV) Indicates Space for Further Upside
A recent analysis from CryptoQuant contributor Darkfost, published on July 17, highlights the importance of monitoring short-term holders — investors who acquired Bitcoin in recent months and often exhibit more reactive trading behavior. A key tool for assessing their impact is the Market Value to Realized Value (MVRV) ratio. This metric compares the current market price of Bitcoin to the average price at which these holders bought in, providing insight into the unrealized profits they are sitting on.
Historically, when the unrealized profit for short-term holders has approached 35%, selling pressure increases and short-term corrections are triggered. This profit threshold typically coincides with an MVRV ratio near 1.35. However, at present, the MVRV for short-term holders stands at just 1.15, well below the level that has preceded significant sell-offs in previous Bitcoin bull cycles.
Short-Term Holder Dynamics and Increased Realized Price
One of the driving factors behind this shift is the rapid increase in the realized price for recent Bitcoin buyers. For the first time, the average price paid by short-term holders has surpassed $100,000, rising to over $102,000 this week. This higher cost basis makes it less likely that the average short-term investor is sitting on major gains, thereby reducing immediate selling pressure and offering more potential upside for Bitcoin’s price.
Recent Price Action and Volume Trends in the Crypto Market
Bitcoin has bounced back strongly from a dip following the U.S. inflation report, recovering from lows near $116,000. As of writing, BTC trades around $118,600, lingering just 3.6% below its all-time high of $123,000 reached in mid-July.
However, some caution is warranted as daily trading activity has declined. Spot trading volume has dropped more than 22%, mirroring a 16.3% fall in derivatives trading and a slight decrease in open interest, according to Coinglass data. This reduction in activity suggests that traders are adopting a more cautious, wait-and-see approach as the market consolidates.
Technical Analysis: Consolidation and Key Levels to Watch
From a technical perspective, Bitcoin is currently consolidating just beneath its upper Bollinger Band, hovering around $122,151. The relative strength index (RSI) sits at 69, suggesting the market remains strong but not yet in overbought territory. Momentum oscillators and the MACD remain bullish, while all key moving averages — from 10-day to 200-day — are sloping higher, confirming the underlying bullish trend.
The 10-day exponential moving average, positioned around $116,464, has provided reliable support on recent dips and could act as a short-term price floor in periods of renewed volatility. Should Bitcoin break decisively above $120,000, analysts expect a retest of the $123,000 all-time high is within reach, provided bullish trading volumes return. Conversely, if the $116,000 support does not hold, attention will shift to the middle Bollinger Band near $112,000 as the next probable downside target.
Summary: Bullish Trajectory with Key Resistance Ahead
In summary, dominant on-chain and technical indicators show Bitcoin’s rally remains robust, with short-term holders not yet sitting on enough profits to trigger massive selling. As a result, BTC could climb another 25% before hitting major resistance, offering traders and investors additional upside potential in the ongoing crypto bull market.
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