Bitcoin’s $87,000 Plateau: Four On-Chain Metrics Predicting the Next Move

Bitcoin began the week trading around $87,000, a slight dip from its recent peak above $88,000. While this minor 0.4% correction over the last 24 hours has some investors on edge, the overall market sentiment remains cautiously optimistic. The question on everyone’s mind: is this a temporary blip, or a signal of a larger trend reversal?

To gain deeper insights, we delve into the analysis of Burak Kesmeci, a CryptoQuant contributor, who meticulously examined four crucial on-chain metrics to decipher Bitcoin’s immediate future.

Key Indicators Reveal a Mixed Bag

Kesmeci’s findings present a mixed picture. While some metrics hint at weakness, none definitively signal a market peak. Let’s examine each indicator individually:

1. Internal Funding Pressure (IFP)

The IFP currently sits at 696K, below its 90-day simple moving average (SMA90) of 794K. Historically, a crossing above the SMA90 has indicated renewed bullish momentum. The current position suggests a lack of strong reversal power.

2. Bull & Bear Market Cycle Indicator

This indicator’s current setup echoes previous soft bearish signals observed during this cycle. The 30-day moving average (DMA30) stands at -0.16, while the 365-day moving average (DMA365) rests at 0.18. A bullish shift would require the DMA30 to surpass the DMA365.

3. Market Value to Realized Value (MVRV)

The MVRV score remains below its 365-day SMA. Typically, this precedes increased selling pressure. However, a recovery is possible once it crosses back above its moving average. A similar event occurred during August 2024’s carry trade crisis, subsequently resolved by macroeconomic stabilization.

4. Net Unrealized Profit/Loss (NUPL)

The NUPL metric is also below its SMA365, currently at 0.49 versus a moving average of 0.53. While not confirming a bearish trend, it suggests Bitcoin needs significant strength to regain its bullish footing.

The Verdict: Uncertainty, Not Necessarily the End

Kesmeci’s conclusion? These on-chain indicators point to short- and mid-term uncertainty but do not definitively signal a market top. Drawing parallels with last year’s macro-driven sell-off, he emphasizes the potential influence of external factors such as economic instability and ongoing trade tensions.

Should macroeconomic conditions stabilize, Bitcoin may resume its upward trend, similar to the recovery observed in 2024. The coming weeks will be crucial in determining Bitcoin’s next trajectory.