Bitcoin breached $54,000 today to mark a new all-time high of $54,770 and still going up as key on-chain metrics look highly bullish suggesting another bullish run. The funding rates are reportedly quite low on exchanges which is a key on-chain metrics suggesting traders are long on Bitcoin. On most of the previous occasions, funding rates skyrocketed with surging prices indicating a market pull.
— Rafael Schultze-Kraft (@n3ocortex) February 19, 2021
The top cryptocurrency in its current run also attained an MVRV-Z value of 7 for the first time since 2017 indicating that the bull run has now entered the advanced phase, and the last time when Bitcoin reached a value of 7, its price skyrocketed 2X in 2017. If Bitcoin price mimics the 2017 price rally, the current price target for the top cryptocurrency is just over $100,000.
#Bitcoin MVRV-Z crosses a value of 7 into red territory for the first time since Dec 2017.
While this indicator suggests we could be in the advanced phase of the bull market, $BTC can still significantly grow from there.
— glassnode (@glassnode) February 19, 2021
Apart from the key on-chain metrics, institutional purchases have continued as Grayscale added another $263 million worth of Bitcoin to their treasury this week itself.
Grayscale have added 5,078 #Bitcoin worth $263 million over the past 7 days
— Bloqport (@Bloqport) February 18, 2021
On-Chain Metrics Bullish, But Negative Coinbase Premium Suggest Retail Buyers Carrying the Rally
The key on-chain metrics are flashing green and thus many believe Bitcoin could easily surpass $55,000 by the end of the week. However, Coinbase Premium that has emerged as a key metric to measure market sentiment is currently negative. This suggests that the recent rally is mostly carried by retail buyers outside the US.
One thing that makes me uncomfortable about this $BTC surge is a negative Coinbase premium.
Buying power seems not to come from US institutional investors, but stablecoin whales and retail investors.
Not a healthy bull without USD spot inflows.
— Ki Young Ju 주기영 (@ki_young_ju) February 19, 2021
Coinbase premium has emerged as a key metric this bull season and even during last week’s rally which saw Bitcoin top $52,000 before correcting to $48K levels, Coinbase premium was the only key metric signaling bearish when most of the other on-chain signals were bullish. The analyst did suggest that the negative Coinbase premium is not necessarily a short signal, however, derivative traders must keep an eye.
Bitcoin price started February on a strong note after spending most of January under $35k price levels. the rising price of Bitcoin without any major pullbacks have made many believe Bitcoin is on the verge of a supercycle and expects its price to reach 6-figure by the end of this year.