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• Bitcoin surged above $64,000 following the U.S. Fed rate cut but fell to $63,786 at press time.
• Bitcoin’s MVRV ratio signaled undervaluation, with further upward momentum needed for a sustained rally.

Ever since the United States announced its latest interest rate cut, Bitcoin [BTC] experienced a gradual rebound in price.

The cryptocurrency surged to a peak of over $64,000 on the 23rd of September, gaining 8.5% in value over the last week.

However, following this surge, Bitcoin retraced slightly to $63,786 at press time—still up 0.2% in the past 24 hours. 

The asset’s recent performance has captured the attention of analysts, especially given its resistance and support levels, which seem to suggest an upcoming shift in momentum.

One such analyst, operating under the pseudonym CoinLupin on the CryptoQuant platform, pointed to Bitcoin’s Market Value to Realized Value (MVRV) ratio as a key indicator of the potential direction of the market.

The MVRV ratio compares Bitcoin’s market value to its realized value, helping traders understand whether the asset is overvalued or undervalued at a given point in time.

Key indicator for Bitcoin’s trend

In a recent analysis, CoinLupin explained that Bitcoin’s 1-year and 4-year MVRV averages have historically served as critical resistance or support levels during various market trends. 

According to the analyst,

“The overall market flow tends to follow a similar pattern.”

CoinLupin highlighted that the MVRV ratio, particularly during the recovery phases in 2023, provided valuable insight into Bitcoin’s price fluctuations.

Source: CryptoQuant

The current market scenario reveals a deviation from past trends.

After a brief period of “overheating” during the recent recovery, the price correction for Bitcoin was milder than expected, and the consolidation period has lasted longer than anticipated. 

This extended period of consolidation has caused Bitcoin’s MVRV ratio to dip below both its 1-year and 4-year averages.

While this could be a signal of the market being undervalued, the analyst suggested that for Bitcoin to regain strong bullish momentum, the MVRV ratio must rise above its 1-year average.

This could trigger a new bullish phase, leading to potential gains in the coming weeks.

Open Interest and Active Addresses

Beyond the MVRV ratio, other key metrics are also worth examining to determine Bitcoin’s future price action.

According to data from Coinglass, Bitcoin’s Open Interest—an indicator of the number of open Futures contracts on the asset—has fallen by 0.85% to a current valuation of $34.78 billion.

Source: Coinglass

This decline in Open Interest suggested that market participants may be closing positions, potentially signaling caution or uncertainty among traders.

Additionally, Bitcoin’s Open Interest volume, which tracks the total value of active contracts, has plunged by 20.86% to $45.77 billion.

A sharp decrease in Open Interest often indicates reduced participation in the market, which could dampen price movement.

On the other hand, data from Glassnode revealed a positive development in Bitcoin’s active addresses, which saw a significant recovery after a steep drop earlier this month. 

Bitcoin active addresses

Read Bitcoin’s [BTC] Price Prediction 2024–2025

The number of active addresses—an indicator of network activity—has rebounded from 600,000 to 797,000 as of today.

This uptick in active addresses may indicate renewed interest in Bitcoin and could potentially signal stronger price movement ahead, especially as more participants engage with the network.

• Bitcoin finally managed to jump above its possible market bottom. 
• Though buying pressure was high, a few indicators turned bearish. 

After a week of price increases, Bitcoin [BTC] has once again turned bearish in the last 24 hours. However, this trend might change in the coming days as BTC was following a historical trend. If history repeats itself, then investors might soon witness a major price movement. 

Bitcoin’s key indicator flashes 

AMBCrypto reported earlier that Bitcoin managed to cross $64k a few days ago, but the move didn’t last. The king coin witnessed a nearly 2% price correction in the last 24 hours, pushing it down back to $63,117.53.

While that happened, Axel, a popular crypto analyst, posted a tweet revealing an interesting development. As per the tweet, for the past six months, volatility has continued to compress, and an alert has appeared on the chart.

Notably, the alert appeared for the 5th time in Bitcoin’s history.

To be precise, such alerts emerged back in 2015, 2016, 2017, and 2023 before again appearing in 2024. Historically, whenever this alert appeared, BTC’s price registered considerable price movement northwards.

Therefore, if history repeats itself, then investors might expect Bitcoin to begin a fresh bull rally in the coming days. 

Source: X

Is BTC ready for a price pump?

Since history indicated a new bull rally, AMBCrypto checked Bitcoin’s on-chain metrics to find whether they also suggested a price hike. Our look at Glassnode’s data revealed that BTC’s price just jumped above its possible market bottom of $61.8k.

If the Pi Cycle Top indicator is to be believed, the upcoming bull rally might as well push the coin towards its possible market top of $109k in the coming weeks or months.

Source: Glassnode

Apart from that, AMBCrypto also reported earlier that buying pressure on the coin was high, which also hinted at a price uptick. However, not everything was in the king coin’s favor.

Our analysis of CryptoQuant’s data revealed that Bitcoin’s aSORP turned red. This clearly meant that more investors were selling at a profit. In the middle of a bull market, it can indicate a market top.

We then took a look at Bitcoin’s daily chart to better understand the likelihood of a bull rally. As per our analysis, BTC was getting rejected at its resistance of $64.1k.

Additionally, the coin’s price had also touched the upper limit of the Bollinger Bands, which hinted at a price correction. 

Source: TradingView

Read Bitcoin (BTC) Price Prediction 2024-25    

If a price correction happens, then BTC might again drop to $62k. But, in case of a bull rally, it will be crucial for BTC to go above the $64k-$65k range, and liquidation will rise sharply there.

Usually, a hike in liquidation results in short-term price corrections.

Source: Hyblock Capital

• The Bitcoin Dominance chart has reached a resistance zone.
• The falling SSR metric agreed with the rising hopes of an altcoin season.

Since Friday, the 6th of September, the crypto market capitalization has increased by 20.33%, going from $1.814 trillion to $2.182 trillion. The $368 billion increase was largely fueled by Bitcoin [BTC].

Source: BTC.D on TradingView

This was seen in the Bitcoin dominance chart. The metric rose from 56.87% on the 8th of September, to 58.59% on the 18th of September before pulling back. It also reached a resistance zone beneath the 60% mark.

The significance of this resistance

The Bitcoin Dominance chart measures the market capitalization of BTC as a measure of the total crypto space, which includes the top altcoins. A rise in the BTC.D means the king outperforms the rest of the market.

Source: Ali on X

In a post on X, crypto analyst Ali Martinez noted that the dominance chart had formed a rising wedge pattern and could have topped out under the resistance at 60%. A drop in BTC dominance would indicate capital flowing into the altcoins.

This could lead to an alt season, a period of bountiful gains for long-term holders of altcoin projects.

Source: BlockchainCenter

The altcoin season index showed a reading of 35, and a 75 reading is necessary for the alt season. The rising score can be encouraging for long-term crypto market participants.

Stablecoin clue that the market is ready for an altcoin season

Source: CryptoQuant

The stablecoin supply ratio metric also suggested that the market is readying for an alt season. The metric’s downtrend implied that the aggregated market cap of all stablecoins was rising relative to Bitcoin.

Read Bitcoin’s [BTC] Price Prediction 2024-25

In turn, this implied an increase in buying power in the market. Therefore, a price rise across the altcoin market is possible.

However, the metric’s readings are nowhere close to the 2023 October lows which brought the previous rally.

• Bitcoin dominance weakens as altcoin performance rises. 
• A potential price correction may be tempered if this trend holds.

Bitcoin [BTC] bears have thwarted another breakout attempt, maintaining pressure as bulls hold above $62K. At $63,390 at press time, a reversal toward $70K may not be imminent.

While some analysts predict a rebound, others suggest BTC dominance might be topping out, hinting at a potential dip. Could this set the stage for an altcoin season?

Bitcoin dominance might be at risk

Historically, Bitcoin dominance has played a crucial role in forecasting market tops, reflecting Bitcoin’s massive share in the crypto market.

Typically, when BTC approaches a key resistance level, a corresponding peak in its dominance is often observed.

However, the chart below revealed a divergence during BTC’s ATH of $73K in March. Despite the price surge, BTC dominance stayed flat, suggesting a decoupling between price action and market dominance.

Source : BGeometrics

Per AMBCrypto, this hinted at growing altcoin interest, with investors viewing them as less risky alternatives to Bitcoin amid its value surge.

Interestingly, Ethereum’s [ETH] recent price action supported this hypothesis, as ETH has outpaced BTC with a double growth rate over the past week, surging more than 15% to $2,656 at press time.

In summary, should altcoin investors monitor BTC’s crucial resistance level for a potential surge? This could be key to predicting the next market moves.

Diversification signals potential market top

According to this data, 15 altcoins have outperformed Bitcoin in the last 90 days, with TAO leading the group, boasting an impressive 80% gain over BTC.

While this number is half of what’s needed for an altcoin season, the significant difference certainly challenges Bitcoin dominance.

Additionally, TAO has recorded a staggering 18% surge in the last 24 hours, far exceeding BTC’s 2%, which reinforces AMBCrypto’s earlier hypothesis.

Notably, TAO’s surge coincided with Bitcoin breaching the key $63K range.

Currently, a spike in TAO outflows has reached a two-month high of $3M, indicating that investors are moving into altcoins as BTC prices rise, signaling a direct correlation between the two.

Source : Coinglass

Put simply, this correlation indicates a potential market top, as many investors are losing faith in a trend reversal and shifting their capital toward less risky alternatives.

If this trend holds, a price correction to $68K – the next resistance – could be tempered, especially as Bitcoin dominance weakens with more altcoins entering the top 50, setting the stage for a potential altcoin season – What are the odds?

The market is at a crucial juncture

Interestingly, on the day Bitcoin retested the $63K range, a significant portion of investors were in profit, as highlighted by the green wig nearing 14.

However, as bulls failed to trigger a breakout and bear dominance reasserted itself, a significant portion of stakeholders began realizing losses.

Source : BGeometrics

If these investors lose confidence in a price correction, it could lead to panic selling, further weakening Bitcoin dominance.

Additionally, this may trigger a shift in asset allocation toward altcoins, which investors might view as a safer option.

In summary, the market is at a crucial juncture. If Bitcoin dominance holds and bulls support a breakout, the altcoin season could falter unless BTC reaches its next resistance at $68K. 

Read Bitcoin’s [BTC] Price Prediction 2024-25

However, if bulls fail to maintain the $64K range and a retracement below $60K occurs – which seems likely – many altcoins might see a temporary surge. 

Yet, for a sustained altcoin season, trust in future gains is essential, which is directly or indirectly tied to Bitcoin dominance. Thus, monitoring it is essential.