Despite recent price corrections, Bitcoin’s valuation metrics indicate the bull market is still intact. Analysts suggest the cryptocurrency may reach $146,000 during this cycle, supported by institutional buying and subdued retail activity.
Why Bitcoin’s Bull Market Has Room to Grow
According to a CryptoQuant report on November 27, Bitcoin is not showing the typical signs of overvaluation seen at market peaks. A key metric, the proportion of holdings by new investors, remains at just over 50%. By comparison, during the peaks in 2017 and 2021, this metric reached over 90% and 80%.
Retail vs. Institutional Investors: A Shift in Market Dynamics
Retail investors have reduced their holdings by 41,000 BTC since October. In contrast, institutional investors and large-scale players have added 130,000 BTC in the same period. Historically, bull markets end when retail buyers dominate activity. This dynamic suggests that institutional investors, including ETF participants, are driving the current accumulation phase.
In November, exchange-traded funds (ETFs) led Bitcoin purchases, with weekly inflows hitting a record $3.1 billion by November 22.
Price Targets and Market Corrections
Bitcoin’s price dipped to $91,000 on November 26 after failing to surpass the $100,000 resistance. Analysts predict a potential 30% correction before Bitcoin breaches the six-figure milestone.
CryptoQuant’s bull-bear cycle indicator has remained in the bullish zone since early November. However, it has not yet reached the overheated levels last seen in March 2024 when Bitcoin hit $70,000.
From a valuation perspective, Bitcoin’s realized price target is now at $146,000. Historically, this price range has marked tops during previous bull cycles, such as in April-May 2021.
Why Bitcoin’s Valuation Still Has Room to Grow
The Profit and Loss (P&L) Index, another key valuation metric, suggests Bitcoin remains undervalued in this cycle. The lack of overvaluation signals indicates room for further price increases.
