Amid Fresh Bitcoin All-Time Highs, Bearish Signals Are Mounting

Summary Bitcoin has blasted to a new all-time high price nearing $119k per coin. Despite the exuberance in the price, the data is less exciting. Miner Volume share and Exchange Volume are reminiscent of previous price peaks. Not all indicators are screaming sell though. MVRV and James Check’s Euphoria Zone still show room to run. But the proliferation of Bitcoin, Ethereum, and Solana ‘Treasury Companies’ reminds of prior manias. I’m staying long. But it never hurts to lock in some profit at new highs. In October 2017 , a biotech diagnostic company named Bioptix rebranded to Riot Blockchain. The stock doubled. That entity is currently known as Riot Platforms, Inc. ( RIOT ); a survivor of the 2017 ‘race to be a blockchain company’ trend that saw numerous publicly traded entities abruptly projecting a loose connection to a trendy market idea. Not to be outdone by RIOT, it was December 2017 when a company called Long Island Iced Tea Corp. (LTEA) made headlines for changing its name to ‘Long Blockchain Corp.’ Shares of that stock more than tripled. That entity is now defunct. Not only that, but ‘Long Blockchain Corp’ proved to be a marvelous sell signal during that cycle: Data by YCharts Bitcoin USD ( BTC-USD ) had peaked just four days prior to Long Blockchain Corp’s name change announcement and proceeded to fall by over 85% over the next twelve months. Why do I share this story? Because nobody rings a bell at the top, but there will always be signs for those willing to decode them. That, and I’d imagine a good portion of today’s crypto bulls weren’t investing in stocks or paying attention to coins during the 2017 run. I was and I find what we’re experiencing in the market today to be an uncomfortable reminder of the hysteria of that time. ‘Treasury’ is The New ‘Blockchain’ Are Bitcoin miners pivoting to high-performance computing and AI? That’s so 2024. 2025 is about K-pop companies and struggling mining outfits flipping to Ethereum USD ( ETH-USD ) and Solana USD ( SOL-USD ) Treasury businesses. Such is the case with BIT Mining Limited ( BTCM ). A company that now plans to pivot operations to a Solana Treasury company . Following the company’s detail-starved press release, the stock closed higher by more than 150% on over 160 million shares traded on July 10th. Not bad for a ticker that had a 30-day average share volume of just 64k the day prior. BTCM is just the latest example of a small-cap company attempting to generate unjustified buying of its stock using crypto as a hype engine. But I won’t just pick on BTCM, we’ve been seeing this for months: Upexi, Inc. ( UPXI ), DeFi Development Corp. ( DFDV ), and Sol Strategies Inc. ( CYFRF ) with Solana. SharpLink Gaming, Inc. ( SBET ), BTCS Inc. ( BTCS ), and Bit Digital, Inc. ( BTBT ) with Ethereum. Metaplanet Inc. ( MTPLF ), GameStop Corp. ( GME ), Trump Media & Technology Group Corp. ( DJT ), and too many other companies to list with Bitcoin. Even Bitcoin miners have been issuing convertible notes to buy Bitcoin—an asset that they’re in the business of selling. But there’s an old principle that generally works in business; when everyone is doing it, it stops working. Are we at the point where ‘everyone’ is buying crypto to juice stock market returns? Of course not. But we’re quite clearly experiencing a phenomenon that hearkens back to the ‘blockchain’ moment in 2017 or the ‘dot com’ bubble before that. And while there will no doubt be some who believe Bitcoin is a special unicorn, immune from a downturn in digital assets; it won’t be. Just as it wasn’t in 2017. Cycle Top Indicators There are various metrics we can consider when we’re trying to figure out when it’s the right time to start lightening up a BTC position. One metric that I like a lot is the holders who are in/out of the money at any given time. Of course, at all-time highs, you’re going to have a lot of winners—and we certainly do today: BTC, In/Out of Money Trend (IntoTheBlock) But I think the reason why this chart above is helpful is that it can give us a sense of cycle maturity. When I look at the holders in the money staying above 90% for most of the last 15 months, it seems quite similar to the 2017 bull run to me. Where the 2021 bull cycle ended with an explosive double-top, the 2024/5 vintage has been more of a grind with several multi-month consolidation periods along the way—just like 2017. A metric that is looking quite similar to the 2021 run is the miner’s volume share: Miners Volume Share (IntoTheBlock) This is the percentage of on-chain volume derived from miner addresses. At present, this figure has fallen to 4.3%. A sign of a healthy network with robust usage would actually be one where miner volume continues to go down over time. Yet, monthly transactions and volume in recent months have been well below last year’s highs. This is likely an indication that miners are simply HODLing to a larger degree than they were when the miner volume share was higher. But again, the last cycle showed an aggressive rally to a marginal nominal new high. That action was accompanied by a collapse in the miner volume share. We’re starting to see that again now. Bitcoin MVRV Z-Score (CoinGlass) Some of the other metrics that are worth considering for Bitcoin cyclical indications are the Pi Cycle Top Indicator, MVRV Ratios, and the Mayer Multiple. I’ve covered these in past articles and am showing the MVRV Z-score in the chart above. This is important; none of these metrics are currently indicating a sell signal . In fact, some of them might even be foreshadowing a BTC price closer to $150k. Maybe Bitcoin will get there, maybe it won’t. We’ll find out. What I do want to share is the Euphoria Zone chart from well-regarded Bitcoin analyst James Check: Bitcoin Euphoria Zone (CheckOnChain) We are not currently in a “Euphoria Zone,” which is triggered when the MVRV gets overheated. But we have seen two distinct Euphoria Zones already this cycle, three if you count the all-time high that happened in early 2024 just before the official halving event. We commonly get several of these Euphoria Zones during a cycle. It’s certainly possible we get another one this year, but I’m personally not expecting a long drawn-out one in the event we get it. Price Action I’m going to share two price charts that I think will be quick and easy to understand. The first is the weekly: Bitcoin Weekly Chart (TrendSpider) While there’s a clear RSI divergence to be aware of here, I actually think this chart looks pretty good. All major MAs are headed higher, the coin is leaving the station as far as the 8-week MA is concerned. The weekly implies higher prices in my view. But this isn’t the only time frame to consider. I’m far less convinced about the monthly: Bitcoin Monthly Chart (TrendSpider) In this chart, I’ve connected the peaks from the last two cycles to estimate a rough trend resistance. We’re there. To be sure, Bitcoin is attempting to break out above it. But we’ve seen a similar attempt failed in the past—April 2021 being a good example. Again, we have RSI divergences. And even the volume trend looks underwhelming. My chart is showing Kraken volume rather than Binance, but most exchanges have volume generally declining. Blockchain.com aggregates volume from multiple exchanges. It speaks for itself: 30-Day Average Exchange Volume (Blockchain.com) We have a coin price ripping higher while exchange volume is collapsing. We’ve seen this before and it foretells a nearing peak. Closing Thought Am I saying sell all your coins today? Absolutely not. You could actually talk me into Bitcoin being at the beginning of a halving cycle blow-off phase that could realistically take it to $125-150k in the weeks/months ahead. I share all of these charts and past signals as a reminder; history doesn’t repeat but it rhymes. The behaviors we’re seeing in today’s equity market are highly reminiscent of what we observed back in 2017. Locking in wins can be difficult at all-time highs. For me, I think there is enough in the data to justify locking in a portion of this win. To be sure, I’m still very much long Bitcoin both on-chain and through the Fidelity Wise Origin Bitcoin Fund ETF ( FBTC ), but I’ve now taken some of it off at $118k BTC.

Source: Seeking Alpha