Despite Bitcoin trading around €108,450, on-chain signals and institutional outlooks indicate its fair value to be significantly higher. Let's delve into the key indicators that could pave the way for a rally towards €120,000.
JPMorgan’s undervaluation thesis aligns with the on-chain improvements and technical resilience of Bitcoin. The MVRV ratio stands at 2.1, well below the overheated levels near 4. Simultaneously, exchange reserves continue to decrease while ETF inflows remain stable, reflecting structural demand.
Bitcoin is currently trading around $108,450, bouncing from the Fibonacci retracement at $104,700, a zone historically considered a strong support. Maintaining this level could pave the way for gains toward $112,000 and $120,000-$123,000.
Moreover, the Relative Strength Index (RSI) sits near 37, indicating weakening bearish pressure and conditions approaching the oversold zone. However, failure to hold $104,000 could trigger a correction with $100,000 as the next key defensive line. Thus, the $104,000-$108,000 price range will dictate Bitcoin’s short-term trajectory.
Derivatives data show cooling futures contract volumes, signaling a decline in speculative activity. A reduction in leverage often precedes market stabilization, favoring sustainable rallies. Institutional investors tend to accumulate during these periods, prioritizing efficiency over volatility.
Additionally, the decline in the Network Value to Transactions (NVT) ratio by over 23% to 23.7 indicates an improvement in the value transferred through the network relative to its market capitalization, which historically supports more sustainable price growth.
Bitcoin’s positive outlook is supported by the alignment of JPMorgan’s undervaluation thesis with on-chain improvements and technical resilience. If the retracement level at $104,700 continues to act as solid support, the path toward $112,000 and $120,000-$123,000 remains achievable.
The cooling in futures contract activity and the decreasing NVT ratio provide additional reasons for optimism about the recovery potential of the leading cryptocurrency. The key question now is whether Bitcoin can reclaim $120,000 in the coming weeks.
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