This Important Declining Bitcoin Metric Signals the Next BTC Bull Run: Details

TL;DR

Bitcoin soared to $67,400, with some metrics suggesting potential for further gains. However, some bearish signals such as an overvalued MVRV ratio and an overbought RSI point to a possible price pullback. Incoming BTC Price Explosion?

The price of the leading cryptocurrency rose more than eight thousand last week, currently trading around $67,400 (according to CoinGecko data). The demonstration fueled great enthusiasm among BTC advocates, many of whom assumed that “Uptober” was finally here.

BTC Price, Source: CoinGecko

Some leading indicators indicate that the asset has yet to experience substantial gains. One example is the supply of BTC stored on exchanges, which according to X user Ali Martinez has fallen to a five-year low.

This development is generally considered bullish as it suggests that holders may be moving from centralized platforms to self-custody methods (which reduces immediate selling pressure). Furthermore, fundamental economic principles dictate that the price of BTC should head north if demand remains constant or increases while available supply falls.

One metric that indicates that BTC could be ahead of a more volatile period is the growing open interest. As reported by CryptoPotato on October 15, the figure hit an all-time high of $19.8 billion. It continued to rise in the following hours, surpassing $20 billion on October 16 (according to CryptoQuant data).

The increase in OI is combined with BTC funding rates reaching their highest positive levels in the past two months. This indicates that most of the open interest is made up of long positions, which, combined with the growing demand reported by CryptoQuant’s CEO, reinforces the narrative of a potential rally.

Some bearish factors

Contrary to the aforementioned indicators that suggest the primary cryptocurrency could experience another bullish push soon, some are hinting at the opposite scenario.

BTC’s MVRV (Market Value to Realized Value), for example, has been gradually increasing over the past week, surpassing the critical ratio of 2. Readings above this mark usually show that the asset could be overvalued and ready for a throwback.

The Relative Strength Index (RSI) is next on the list. This technical analysis tool measures the speed and change of price movements and is commonly used to identify overbought or oversold conditions. When the ratio is above 70, it indicates that BTC is in overbought territory, meaning a correction could be imminent. The RSI has been above this level for the past three days.

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