- BTC could be nearing its market top per S&P 500 (SPX) correlation.
- However, the MVRV Z-score indicates that bulls still have extra upside potential.
Bitcoin’s [BTC] $60K—$71K price range has hit the third month, and the lower odds of Fed rate cuts seem to be dampening break-out prospects in the near term.
Amidst the boring consolidation, an analyst has established that BTC could be closer to its market top than most think. Drawing his evaluation from the S&P 500 Index (SPX), crypto analyst CryptoCon noted,
‘Have #Bitcoin tops been governed by the stock market all along? 134 weeks exactly from each SPX/stock market top to the next Bitcoin top. This makes our next target date range the week of July 29th this year, very soon… interesting.’
Source: X/CryptoCon
According to the analyst, BTC top always occurs a few weeks after SPX hits a market cycle top. However, the most intriguing finding was that it took roughly 134 weeks to hit the SPX top from the last BTC cycle top.
Based on this correlation and assumption, BTC could hit cycle top by the end of July 2024. However, correlations don’t equal causation, and that means an SPX top might not necessarily facilitate a BTC cycle top.
However, another user seemed to support the SPX/BTC correlation and stated,
‘As SPX rises in value, investors look for further down the risk curve for more profit. This is how liquidity shuffles into #BTC and other risk assets’
Additionally, a recent AMBCrypto report established a warning sign as the Bitcoin network demonstrated stagnancy and possible profit-taking activity from the LTH (long-term holders) cohort.
BTC has more room to pump?
However, the Market Value to Realized Value (MVRV) Z-score suggested more room for upward potential was likely before the market tops out.
Source: Look Into Bitcoin
The MVRV Z-score removes the short-term noise to gauge BTC’s undervaluation or overvaluation to its ‘fair value’ from a long-term perspective. Historically, BTC topped when the metric reached the pink area (value 7 – 9).
As of press time, the metric was slightly above 2, with a lot of room to hit the pink area if the historical trend plays out again.
However, another Bitcoin maxi and analyst, Fred Krueger, remained optimistic that BTC would go up if it were evaluated against gold prices and gold ETF flows. Kruger noted,
‘Bitcoin has just about doubled in price since the ETF was announced. But it did so off of a market cap of 0.7 Trillion versus 2.6 Trillion for Gold. It also suggests regardless of flows, we could do another 2x just as a “continuation.’