There are five important warning signs when Bitcoin (BTC) is nearing its price peak, and one of those indicators has flashed red, according to on-chain data service CryptoQuant.
In a post on X on November 19, CryptoQuant shared the top indicators to watch to assess whether Bitcoin's price is approaching an unsustainable level.
The first sign is the "MVRV ratio," which measures the market value of Bitcoin - the total value of all mined coins - compared to its realized value, which is the total final selling price of all circulating Bitcoin.
CryptoQuant said if this ratio exceeds 3.7, it typically indicates that Bitcoin has reached a price peak at that time. Currently, this ratio is at 2.67 according to data from CoinGlass.
Bitcoin's MVRV ratio reached a high of 7 in February 2021 when Bitcoin surged to reach a record high of around $60,000.
The next indicator to watch is the Greed and Fear Index, which measures market sentiment.
When this index reaches 80 out of 100 points - combined with other indicators - Bitcoin may be nearing a local peak, according to CryptoQuant.
This index has exceeded 80 since November 12 and reached as high as 90 on November 17 and 19, the highest level since February 2021.
The third sign looks at the amount of new money entering the market. Without significant new inflows, cryptocurrency prices tend to stall and eventually decline.
CryptoQuant said the Bitcoin realized capitalization growth chart is an ideal tool to monitor new money entering the market, and currently this chart shows relatively high new inflows, meaning Bitcoin is in a "price appreciation phase."
Another indicator assesses whether long-term BTC holders are actively selling. The Coin Days Destroyed tool tracks Bitcoin movements that have been held for a long time and checks if these coins are being sold.
If this indicator spikes above 15-20 million, CryptoQuant said this could be a short-term bearish signal for Bitcoin. Currently, this indicator shows 15.1 million.
The final indicator is the Inter-Exchange Flow Pulse (IFP), which tracks the movement of Bitcoin in and out of derivative exchanges.
CryptoQuant said the IFP still shows a bullish structure, with traders continuing to transfer Bitcoin to derivative exchanges to use as collateral.
Bitcoin's IFP is currently around 730,000 and trending upwards. In previous price rallies, the IFP reached as high as 1 million and dropped as low as 200,000 during the late 2023 bear market.
BTC prices have continued to reach new highs since Donald Trump's election, with the latest peak on November 20 above $94,000.
Some analysts believe Bitcoin still has significant upside potential, including VanEck's digital assets research head Matthew Sigel, who forecasts Bitcoin could reach $180,000 next year.
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