This week, Bitcoin has continued its upward trend, successfully reclaiming and maintaining a position above the $85,000 threshold. This achievement corresponds to a weekly increase of nearly 4.7%, suggesting a potential shift in momentum following several weeks of stagnant and bearish market behavior.
Although short-term gains have been observed, indications for Bitcoin’s next significant move seem to be surfacing. In particular, a renewed examination of market health and investor behavior is aligning with the current price movements of BTC.
On-chain metrics and sentiment indicators are being utilized to evaluate whether the current recovery marks a continuation of the bullish cycle or signifies a transition into a new market phase.
A framework recently shared by CryptoQuant contributor Woominkyu provides a broader perspective on Bitcoin’s positioning through the Bitcoin Combined Market Index (BCMI).
Evaluating Market Health via BCMI Metrics
According to Woominkyu, the BCMI offers an extensive overview of Bitcoin’s market state by aggregating four primary metrics: MVRV (30%), NUPL (25%), SOPR (25%), and the Fear & Greed Index (20%).
Each metric reflects crucial aspects of network valuation, investor sentiment, realized gains and losses, and overall market emotions. The index calculates a combined score based on the weighted contributions of these metrics, which can indicate if the market is overheated or undervalued.
Historically, a BCMI score under 0.15 is linked to extreme fear and indicates potential buying opportunities, while scores exceeding 0.75 are commonly associated with market peaks or sharp corrections.
Currently, the BCMI is below the 0.5 threshold, suggesting that Bitcoin has yet to enter an overheated market. Woominkyu proposes two potential scenarios: either the market is experiencing a typical correction within an ongoing bull cycle, or it is beginning to show unusual signs of transitioning into a bearish environment.
Important Levels to Monitor in Bitcoin
The analyst emphasizes the significance of tracking the 7-day and 90-day moving averages of the BCMI for clearer market direction.
If the index starts trending upwards, it could indicate renewed momentum and a potential return to higher price levels. Conversely, a prolonged decline may confirm a broader trend reversal. Meanwhile, IntoTheBlock has recently highlighted on-chain resistance levels for BTC.
The market intelligence platform has specifically noted the $97,400 level, stating that it represents “where approximately 1.44 million BTC are currently held at a loss,” implying that if the BTC price reaches this point, we may witness a pullback.
Is Bitcoin on its way to test its highs?
The red bubbles in this chart emphasize levels where underwater investors might sell as they break even, particularly if uncertainty lingers.
A crucial zone is around $97.4k, where roughly 1.44 million BTC are currently holding at a loss. pic.twitter.com/LKaDBen7cU
— IntoTheBlock (@intotheblock) March 24, 2025
Featured image created with DALL-E, Chart from TradingView
