A new all-time high above $118,000 has been set as bitcoin soared after gaining more than 6% in the last 24 hours.
However, despite the impressive performance, the evidence from on-chain data suggests that the market is not in overheating conditions – and indeed shows room for further growth.
During the previous peaks in March and December 2024, the Market Value to Realized Value – MVRV ratio (an indication of when the trading price is below fair value or more simply an indicator used to assess whether a cryptocurrency is overvalued or undervalued) climbed above 2.7 as speculation intensified.
Today’s high, on the other hand, comes with a more modest reading of 2.2 and reflects a more stable market environment.
According to CryptoQuant, the data shows that holders of short-term securities (less than one month) now make up just 15% of the market, when at previous peaks they exceeded 30%. A fact that suggests limited new capital inflows and more mature investment behavior, with investors opting for gradual accumulation rather than quick gains.
At the same time, the SOPR for short-term holders means that recent buyers are not selling aggressively, but are keeping seller activity subdued. This index measures whether currency movements are made at a profit or loss, making it a key tool for analyzing investor psychology.
The Mining Position Index (MPI) also continues its downward trend, suggesting subdued selling activity as many mining companies are choosing to accumulate Bitcoin rather than liquidate. Such behavior stands in stark contrast to previous cycles, when rising prices led to a surge in selling.
As CryptoQuant explains, the current rally appears to be based on strategic investments by sovereign and institutional players rather than spasmodic moves by retail investors, setting the stage for a different – more structural – upward cycle. “Interpreting on-chain data now requires a deeper approach,” the platform notes, noting that the absence of excess in the current rally strengthens the prospects for further medium-term upside.
This pattern of cautious optimism extends further. The data reveals that even amidst the surge, traders remain reluctant to move coins back to the exchanges.
Traders are staying put
Bitcoin has seen a nearly 20% price rise since the local low on June 22, yet traders are not rushing to move coins back to exchanges, according to Santiment.
Instead, holders continue to shift bitcoin into self-control wallets. In the last four months alone, exchange balances have dropped by 315,830 BTC, or 21%. The five-year picture is even more significant.
Since July 2020, 1.88 million Bitcoins have been removed from exchanges, reducing balances by 61%. With fewer coins on exchanges, sudden mass sales become less likely. This means that long-term investors are choosing personal storage over potential short-term trading.
Despite the historic highs, some analysts warn that potential new tariff hikes or geopolitical shocks could change the balance. However, the current phase seems to rely less on speculation and more on institutional and geo-economic fundamentals.
Ask me anything
Explore related questions