Bitcoin, signal seen just before 2019 and 2023 bull markets reappears… Will it reach $90,000?

Bitcoin, signal seen before two past bull markets detected… Will it re-challenge $90,000?

▲ Bitcoin (BTC) Bull Market ©CoinReaders

An on-chain signal that appeared at the beginning of the major bull markets in 2019 and 2023 for Bitcoin (BTC) has been detected again. With the Market Value to Realized Value (MVRV) breaking above its long-term baseline, and an increase in whale transactions and inflows into Bitcoin spot ETFs, expectations for a recovery to $90,000 are growing, but short-term overbought signals have emerged as a cautionary factor.

According to crypto media outlet Finbold on September 23 (local time), on-chain data released by Glassnode on the 22nd showed Bitcoin's Market Value to Realized Value (MVRV) once again breaking above its 365-day moving average (MA). This same crossover signal appeared at the beginning of the uptrends in 2019 and 2023, making it a momentum indicator closely watched by on-chain analysts. At the time of writing, Bitcoin was trading at $85,873, having risen over 50% from its July 1st low of $57,749.

MVRV is an indicator that compares Bitcoin's market value with the average acquisition cost of all coins on the network. If this figure rises above the 365-day average, it can signal a shift to bullish momentum after an accumulation phase. Recently, MVRV recovered after remaining below its long-term average for several months. However, it is still far from the extreme levels seen when the market overheated at past cycle peaks, suggesting that it has not yet entered a historically observed overheating phase.

Network activity by large investors has also surged. According to data released by crypto analyst Ali Martinez, more than 2,722 transactions exceeding $1 million were processed on the Bitcoin network in a single day on the 22nd. The increase in high-value transactions even as prices have risen significantly from the July lows suggests continued activity by large holders. Institutional demand is also strong, with approximately $999 million net inflow into US Bitcoin spot ETFs on the 21st, and $714.7 million on the 22nd. BlackRock's IBIT and Fidelity's FBTC accounted for a significant portion of the inflow.

The technical structure has also leaned bullish. Analysis presented by TrendSpider shows Bitcoin breaking above a large Rounded Bottom pattern, associated with long-term trend reversals, and surpassing the key resistance level of $80,000. The price is well above both the 50-day Simple Moving Average (SMA) of $73,689 and the 200-day SMA of $70,614.

However, short-term overheating concerns remain. The 14-day Relative Strength Index (RSI) is at 73.62, having crossed 70 and entered the overbought zone. An RSI above 70 indicates strong upward momentum but can also signal an increased likelihood of short-term consolidation or a temporary price correction. With the MVRV signal, which appeared at the beginning of two major past bull markets, coinciding with institutional and whale demand, it remains to be seen whether Bitcoin can digest the short-term overheating and continue its attempt to reclaim $90,000.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*