$BTC just logged another intra-day high at over $98,000. Is the market overheated yet?
We have two bits of evidence that suggest "not yet" -- Qualitative and Quantitative
Qualitative Evidence
In a real market top, people stop asking about overvaluation and start asking delusional questions like "Can $BTC reach $10,000,000 this year?" You'll hear discussions about how a bear market will never come and "super cycle" will be the norm. We are seeing none of that.
Quantitive Evidence I
Funding rates for leveraged traders when $BTC is short-term toppy tends to be very high. Here's an image from the time of writing.
Image of funding rates for $BTC, $ETH, $SOL, and $DOGE across major platforms from CoinGlass. All are just barely positive.
When $BTC first surged into the $90k range, its funding rate was over 20%. We are seeing none of that at the moment.
Quantitative Evidence II
Below is an image of the Market Value (MV) to Realized Value (RV) ratio, which has been z-scored to identify red and green zones.
This basically measures whether the value of $BTC in the market is too much higher than the capital flowing into it.
Image showing the MVRV ratio for $BTC z-scored to assess overbought and oversold territory.
You can see that, no, by this standard metric, we are a long way from over-valuation. That doesn't mean $BTC will go straight up (or that it can't crash). It means that by historical standards this period is not too hot.
As always, none of this is financial advice. Always DYOR. We're just reporting data. If you would like more such data, 👉Join our Trading Community’s newsletter! 👈
