What’s Next After Bitcoin Reaches ATH? ARK Invest weighs in.

Bitcoin (BTC) has still shown strong gains and potential. This is according to ARK Invest's latest report, “The Bitcoin Monthly”, which covers the events of March 2024.

BTC price hit a new all-time high (ATH) of $73,737 in March, marking a roughly 18.5% gain since the beginning of the month. The price level represents an increase of nearly 75% in Q1 2024. However, after achieving this ATH, BTC entered a period of consolidation.

The Bitcoin market, despite being profitable, remains brutal.

ARK Invest's analysis shows that market sentiment is strong despite high returns by long-term holders. This trend is highlighted by the group of investors who have been around for five years or more. Their commitment promotes stability regarding profitability.

One of the leading indicators, the MVRV Z-Score, suggests that Bitcoin has yet to enter the super-exciting zone seen so often at previous cycle peaks.

Read more: Bitcoin price prediction for 2024/2025/2030

Market Value to Realized Value (MVRV) Z-Score is an indicator that measures market value to realized value. While technically overbought according to certain indicators, the MVRV Z-score suggests Bitcoin's relative valuation is below par, indicating an unsustainable market bubble.

As for technical support levels, Bitcoin price has surpassed several key metrics including the short-term bearish price base and the 200-day moving average. This suggests an unbeatable market value; However, a significant sales price can cause price adjustments.

March saw a significant balance in the inflow and outflow of funds in Bitcoin ETFs in the United States, with assets under management rising to more than $59 billion. This indicates continued interest and investment in Bitcoin, strengthening its appeal to retail and institutional investors.

“In March, US spot Bitcoin ETF inflows and outflows hit record balances of $1.6 billion and $1.4 billion, respectively,” ARK Invest wrote.

For a more positive view, Bitcoin's risk-adjusted returns are improving. ARK notes that Bitcoin's four-year annualized returns and the Sharpe ratio hit a three-year high. This acceleration will follow lower volatility and less dramatic price action in 2022 and 2023.

On the innovation front, Bitcoin scaling solutions are seeing rapid developments. More than 50 independent projects are building on top of Bitcoin's base layer, using technologies like rollups, state channels, and sidechains.

As of October 2023, significant contributions from initiatives such as Lightning Network, Rootstock, and Stakes have locked in a value of nearly $700 million.

However, it is important to remember that the outlook presented here by ARK Invest only covers Bitcoin's performance through March 2024.

Read more: Bitcoin Half Countdown

In the coming months, other factors should be taken into account, which may dictate how BTC performs. These factors include the upcoming Bitcoin halving event and macroeconomic conditions.