Bitcoin to level at $44,000 following rally: CryptoQuant

Bitcoin (BTC) price followed the asset's rally and entered a correction phase above $44,000.

According to a weekly report from on-chain analytics platform CryptoQuant, a number of valuation metrics indicate that the underlying digital asset is due for a correction as its price has risen too quickly.

BTC correction level

One of the metrics is CryptoQuant's Bull-Bear Market Cycle Indicator, which entered the red area for the third time this year. Historically, the prices of crypto assets have seen a correction for the past two periods and the indicator has moved into an overheated bull phase.

Another measure is the percentage of Bitcoin supply in profit. On-chain data shows that 90% of BTC distribution is profitable, and according to previous circles, the current level indicates the beginning of a price correction.

Additionally, the crypto market has seen selling pressure from short and long-term holders, whales and miners. Short-term holders began to sell their assets at huge profit margins, while long-term holders sold their assets at prices above $40,000. Average sleep time data shows that six months worth of bitcoins were consumed before the asset's price fell.

Bear market in the past

Additionally, BTC miners unloaded more coins when it rose to $44,000, selling their holdings at an average profit of 40%. This is evident in the high mining flow seen in the last few days.

Miners are believed to be taking advantage of the higher prices by selling some of their holdings because the value of block rewards has grown faster than mining. They are also collecting resources for the upcoming Bitcoin halving event, which will reduce the reward by 50%, which will reduce the number of BTC produced each day.

However, CryptoQuant says that the bear market is in the past, and BTC has moved to the bull level, although the cryptocurrency has fallen by about 10% since the latest peak. Data from CoinMarketCap shows that BTC has gained 4% in the last 24 hours and is trading at $42,700 at the time of writing.

Meanwhile, the liquidity of the crypto market is improving as the market value of the stable coin is increasing. The largest, Tether (USDT), has hit a new high with a market cap of more than $90 billion. The total stablecoin market cap has increased to $129.19 billion, according to data obtained by Defilama.