As bitcoin’s price recently pulled back after nearly breaching the psychological $100,000 barrier, some investors may be questioning whether the bull run has run out of steam. However, leading blockchain analytics provider CryptoQuant believes that this is merely a temporary setback before the king of crypto resumes its relentless march higher.
In a comprehensive report shared exclusively with CoinDesk, CryptoQuant outlined multiple on-chain data points suggesting that bitcoin still has plenty of room to appreciate before the current market cycle reaches its apex. By analyzing historical patterns and comparing the present state of the market to previous cycle tops, the firm has arrived at a staggering peak price projection of at least $147,000 for BTC in the coming months.
Key Metrics Signal Bullish Continuation
To build their compelling case, CryptoQuant’s analysts examined several crucial indicators that have reliably signaled the approach of market tops in prior cycles. One such metric is their proprietary P&L Index, which aggregates various on-chain valuation measures to determine whether bitcoin is overvalued or undervalued at a given point in time.
Remarkably, while the P&L Index confirms that BTC is undoubtedly in a bull market, it remains far from the extremely overheated levels witnessed at the climax of previous parabolic advances in 2013, 2017, and 2021. This implies that there is still significant upside potential before the current uptrend becomes unsustainably frothy.
Retail FOMO Yet to Kick In
Another telltale sign of a looming market top that is currently absent is the frenzied participation of retail investors succumbing to FOMO (fear of missing out). Historically, cycle peaks have coincided with a surge of retail buying as less sophisticated investors rush in at the eleventh hour, driven by greed and dreams of overnight riches.
Contrary to this classic pattern, CryptoQuant’s data reveals that retail investors have actually been net sellers of bitcoin since October, dumping around 41,000 BTC in apparent profit-taking. Meanwhile, larger players have been accumulating, adding approximately 130,000 BTC to their holdings over the same period.
“Price tops typically occur when new investors enter the market to buy at extremely high prices, which causes them to hold a large proportion of the total value invested. Previous bull cycles have ended when retail investors buy aggressively, which is not the case today.
CryptoQuant Report
Plenty of Fuel in the Tank
Further bolstering the notion that bitcoin’s bull run is far from exhausted is the relatively low level of participation from new market entrants. The value of BTC held by addresses that acquired their first coins less than six months ago currently stands at just 50% of bitcoin’s realized cap (the aggregate cost basis of all BTC). By comparison, at the height of prior manias, newbies accounted for a staggering 80% to 90% of Bitcoin’s total realized value.
This data convincingly demonstrates that the recent rally to $100,000 has primarily been driven by longer-term, experienced holders rather than an influx of speculative latecomers. As such, there appears to be ample dry powder on the sidelines to propel bitcoin significantly higher before unbridled greed and euphoria herald the end of the current growth cycle.
Realized Price Bands Point to $147K
So, just how high could bitcoin realistically soar before the music stops? To answer this burning question, CryptoQuant turned to its realized price bands indicator. In previous bull markets, BTC has historically topped out around the upper band, which represents four times the average price at which all circulating coins last moved.
With bitcoin’s realized price currently sitting at $36,000-$37,000 and rising rapidly, the upper band now stands at a lofty $147,000. If precedent holds, this figure represents a conservative estimate of BTC’s peak potential in the coming months before the inevitable correction ushers in a new bear market.
Institutions and Nations to Drive Next Leg Up
Of course, past performance is never a guarantee of future results, and bitcoin’s ascent to $147,000 and beyond is by no means a foregone conclusion. However, there are compelling fundamental reasons to believe that this cycle could prove even more explosive than those that preceded it.
Chief among these is the growing involvement of institutional investors, many of whom are just beginning to dip their toes into the crypto space. As the perceived legitimacy of bitcoin as an investable asset continues to grow, the floodgates of institutional capital could open wider, unleashing a tsunami of demand that catapults BTC to mind-boggling heights.
Another potential game-changer is the increasing likelihood that sovereign nations will begin accumulating bitcoin as a reserve asset. With the global monetary system in unprecedented disarray and confidence in traditional safe havens like the U.S. dollar waning, it’s not hard to imagine a future in which central banks start stashing sats alongside their gold and foreign exchange holdings.
In light of these powerful secular tailwinds, CryptoQuant’s $147,000 target may prove to be a floor rather than a ceiling for bitcoin’s next all-time high. One thing is certain: The era of institutional and nation-state adoption of bitcoin is just beginning, and those who position themselves accordingly stand to reap outsized rewards as the greatest wealth transfer in human history unfolds.
