- The cryptocurrency market has experienced a massive rally over the past few months.
- Bitcoin price is near the all-time high at $20,000 for the first time since December 2017.
The cryptocurrency market seems to be stronger than ever and has seen a $250 billion increase in its market capitalization since the beginning of October. Bitcoin is currently trading at $19,000, on the verge of hitting a new all-time high. Other popular coins like Ethereum managed to crack $600 for the first time in two years and XRP had a colossal rally to $0.78.
Three on-chain metrics indicate a potential pullback is nearby
The Crypto Fear & Greed Index chart shows that traders are extremely greedy right now at 94 points, the highest value since June 2019 when Bitcoin peaked at $13,970 but experienced a nasty retrace towards $8,215 only three months later.
Crypto Fear and Greed chart
This is an indicator that the cryptocurrency market might be close to topping out. We can also observe another period of high greed throughout August 2020 when Bitcoin was trading at $12,468 before a notable pullback towards $10,000. This last pullback was notably weaker but still represented a 20% drop which would put Bitcoin at $15,000 at current prices.
BTC/USD weekly chart
Additionally, on the weekly chart, the TD Sequential indicator has just presented a sell signal for the first time since June 2020. This indicator has been reliable in the past as Bitcoin had a pullback of around 14% on June 1, 2020. It seems that both charts are pointing out a potential bearish price target of $15,000. The RSI is also overextended, adding even more strength to the signal.
BTC MVRV chart
The MVRV chart is also reaching a dangerous zone above 12.8% which in the past was an accurate indicator of upcoming correction periods. Bitcoin would need to trade sideways for a substantial period of time to cool off these charts and invalidate the bearish outlook in the short-term.
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