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Bitcoin network activity hits 1-year low – Is BTC overvalued at $98K?
Bitcoin’s recent price surge past the $100,000 mark has left many wondering if the cryptocurrency is overdue for a correction. The latest data suggests that Bitcoin’s network activity has hit a one-year low, sparking concerns about whether its current valuation is sustainable.
As of now, Bitcoin (BTC) is trading at around $98,000 after experiencing an impressive 2025 rally. However, a closer look at the cryptocurrency’s fundamental metrics reveals a growing disconnect between its price and on-chain behavior. Key indicators like Metcalfe’s law and the Market Value to Realized Value (MVRV) ratio suggest that Bitcoin may be overvalued.
The Metcalfe Valuation Bands have historically guided Bitcoin’s price movements, with an upper limit of $95,000 being reached in recent weeks. This level now serves as a crucial resistance point for bulls while also defining the potential entry and exit points for investors. The red ($48K) band has been breached multiple times since March 2024, but a significant drop in active addresses, coupled with an MVRV below 2.4, paints a picture of reduced on-chain engagement.
Bitcoin’s recent decline in daily active addresses is particularly concerning as it suggests that the cryptocurrency’s network growth has stagnated. A stark contrast to this trend is presented by Metcalfe’s law, which estimates Bitcoin’s fair value between $48K and $95K. At its current price, Bitcoin has already surpassed these projections.
The current market dynamics are characterized by a significant increase in momentum indicators. This development presents both buying and selling opportunities depending on the direction taken by the bulls. A drop below the 50-day Moving Average (MA) at $98,710 would potentially put the upper Metcalfe valuation band in play.
Considering the recent trend of institutional investors, regulatory clarity, and macro trends sustaining the rally, it is crucial for traders to monitor network growth and key support levels. If Bitcoin fails to maintain its momentum above the MA level, a healthy correction toward $95K-$90K could be expected.
Source: https://ambcrypto.com/bitcoin-network-activity-hits-1-year-low-is-btc-overvalued-at-98k/
