Market Dynamics Shift: Bitcoin’s Price Correction Amidst Sustained Growth Potential?

Bitcoin’s market steps back from ‘extreme greed’ – A positive sign?

December’s sell-offs provided the much-needed market reset for Bitcoin on the price charts. The cryptocurrency has exited the “extreme greed” zone and could aid in sustainable growth.

According to the pseudonymous on-chain analyst Dark Fost, the “extreme greed” phase marked an overheated market and a potential pullback. This led to the cryptocurrency’s decline from $108k to nearly 90k.

New market interest in Bitcoin, as tracked by Google Trends, dropped significantly as the asset declined below the $100k milestone. Historically, a surge across Google Trends is associated with euphoria and potential market corrections or tops.

Combining these trends, Dark Fost noted that the aforementioned indicators mean that BTC has more room for growth in the near term. He stated, “Overall sentiment remains positive, yet interest from potential newcomers stays relatively low; it may lead to the continuation of the bullish phase in the mid-term.”

His observation was echoed by the True MVRV (Market Value to Realized Value) – a metric used to gauge whether BTC is overvalued and track the market cycle. The metric accurately pinned previous local and market cycle tops.

In fact, the 2024 March and December tops were triggered when the metric tapped 2. In most cases, a surge to 4 marked a cycle top. At the time of writing, the metric had retreated to 1.7 and was far from 4, suggesting that BTC’s cycle top wasn’t close.

Another cycle top indicator, the Pi Cycle top, was far from triggering this market peak.

In summary, BTC’s retreat from “extreme greed” can be seen as a welcome relief for extended and sustainable growth in the mid-term.

Source: ambcrypto.com