Bitcoin Price Dip to $91K Possible: On-Chain Data Suggests Underlying Strength
Key Takeaways:
- Bitcoin’s year-over-year performance and realized price indicate robust long-term holder support and potential undervaluation.
- Standard Chartered projects a Bitcoin price target of $110,000–$120,000 by Q2 2025.
- Positive funding rates suggest a potential bullish squeeze towards $90,500.
Bitcoin (BTC) closed the week near $94,000, achieving a remarkable 53.61% year-over-year return. Since the 2024 halving, the market’s trajectory has shifted from the initial exuberance to a more mature bull trend, driven by on-chain growth rather than speculative fervor.
Bitcoin’s Fundamentals Outshine Fear and Speculation
Bitcoin analyst Axel Adler Jr. highlighted that the year-on-year (YoY) realized price—the average price at which BTC last moved—soared 61.82%, significantly outpacing the YoY decline of the market value to realized value (MVRV) ratio by 8.98%. This signifies that long-term holders are establishing a higher price floor, a positive indicator for the cycle.
The negative MVRV suggests Bitcoin is trading below its intrinsic value compared to a year ago, a pattern historically preceding significant rallies. This compressed valuation points to substantial upside potential, with analysts predicting new highs exceeding $110,000 if demand accelerates.
Analyzing Bitcoin’s realized price across different holding cohorts reveals a decrease in speculative premium. The current market resembles past accumulation phases, suggesting a potential acceleration in momentum within five to six weeks.
This bullish outlook aligns with Standard Chartered’s head of digital assets research, Geoffrey Kendrick’s forecast of Bitcoin reaching $120,000 by Q2 2025, driven by strategic asset reallocation from the US. Kendrick noted the correlation between high US Treasury term premiums and BTC’s price, along with time-zone trading patterns suggesting US investors’ preference for non-US assets.
Related: Bitcoin Could Hit $210K in 2025, Says Presto Research Head
Bitcoin Futures Market Hints at a Potential Long Squeeze
Positive Bitcoin funding rates indicate a prevalence of long positions, signifying bullish sentiment above $90,000. A temporary dip in funding rates sparked speculation about a potential long squeeze pushing prices toward $97,000. However, the return to positive funding rates suggests a sustained bullish pressure.
A long squeeze occurs when a price drop forces heavily leveraged long traders to sell, potentially exacerbating the decline.
Following a 1.58% price drop after the New York market opened on April 28th, BTC may test support around $90,500 in the coming days.
As the chart shows, bullish momentum is weakening, suggesting a potential retest of the fair-value gap (FVG) between $90,500 and $88,750 on the 4-hour chart. A bearish divergence with the relative strength index (RSI) formed after the price failed to maintain a position above $95,000.
This article does not provide investment advice. All investment decisions involve risk, and readers should conduct thorough research.