Bitget Token soars as key indicators sends a major warning

Bitget Token price continued to rise this week despite the Santa Claus rally in the crypto industry remaining elusive.

Bitget Token (BGB) rose to $4.97, meaning it is up over 470% from this year’s lows.

It is unclear why this increase is occurring, but it is likely due to growing market share in the crypto industry. CoinGecko data shows it has become the eighth-largest exchange in the industry, with over $91 billion in trading volume last month.

On-chain data shows that BGB price growth attracts some Fear of Missing Out as the number of active addresses increases. Its 30-day active addresses have increased from under 100 in October to almost 200.

BGB active addresses | Source: Santiment Bitget Token price MVRV indicator is rising

There are several reasons why the BGB price may decline in the coming days. First of all, there are signs that the Wyckoff Method is entering the formative phase. This phase follows a long period of accumulation, in this case lasting more than two years. It is usually characterized by supply being higher than demand, followed by distribution and discounting.

Secondly, IntoTheBlock’s data shows that the market value rose to a record high of 9.83 based on realized value. This is a popular indicator that compares the market value of a cryptocurrency to its realized value and then finds its standard deviation.

As we wrote about Bitcoin, when the MVRV indicator rises above 3.8, an asset is said to be in the overbought zone. In BGB’s case, this figure rose to 9.83, which means it is overbought, which could lead to a pullback.

BGB MVRV indicator | Source: IntoTheBlock BGB is overbought and mean reversion is possible BGB price chart | Source: crypto.news

Meanwhile, the BGB price may decline due to the coin being overbought. The Relative Strength Index has risen to the overbought level of 82, while the two lines of the Stochastic Oscillator are approaching 100.

Moreover, it remains well above the 50-day and 100-day Exponential Moving Averages. This is about 88% higher than the 50-day MA, which means the concept of mean reversion may come into play. This is a concept where an asset usually falls back to the moving average after diverging for such a long time. This is remarkable because this year the standard deviation was highest.

Therefore, there is a possibility that investors will experience a sharp reversal after taking profits, as we have seen with other popular cryptocurrencies that move parabolically, such as Ripple and Stellar.