Bitcoin (BTC) Rally Could Still Have Room to Run Before Hitting a Top, Analyst Explains

An analyst has explained how the Bitcoin rally could still have room to run before hitting a top based on the data of this indicator.

An analyst has shared his thoughts on the recent Bitcoin price rally and how an indicator could be suggesting that there’s still more steam left in the rally.

According to the analyst, the Bitcoin Macro Oscillator (BMO) is still indicating that the top of this rally may not have been reached yet. The indicator combines four different metrics to create an oscillating value around the zero mark.

The indicators used in the BMO are the market Value to Realized Value (MVRV) ratio, Volume-Weighted Average Price (VWAP) ratio, Cumulative Value-Days Destroyed (CVDD) ratio, and Sharpe ratio.

The chart below shows how the oscillator based on these metrics has fluctuated in value over the past few Bitcoin cycles.

Tops in the cryptocurrency’s price have historically coincided with the metric reaching relatively high levels. For instance, the 2013 and 2021 tops occurred when the indicator breached the 1.8 level, while the 2017 peak occurred when the oscillator hit 2.4.

So far, in the current rally, the oscillator has achieved a peak value of 1.2. The high coincided with the asset’s all-time high (ATH) price, which continues to be the top of the run thus far.

However, when considering the historical precedent, this value doesn’t seem to be high enough for the top to have been cyclical. As the coin’s price has consolidated since this high, the oscillator has cooled off, now hitting just 0.69.

Thus, the asset has gained more distance from the zone where tops have occurred in the past. “This 2.5 months of consolidation under bullish demand has been very good for Bitcoin, it means the price has more room to run before topping out,” Woo said.

The analyst suggests that BTC could now have 2 to 3 levels of the BMO to climb before reaching the macro top.

Woo also highlighted a potential positive sign for Bitcoin regarding its net capital flows. A chart showing this metric’s trend over the last few years is shown below.

The chart shows that net capital flows into Bitcoin were quite high during the surge toward the price ATH, but the money stopped flowing in as the asset fell into sideways movement.

However, in May, the net flows have finally reversed the trend and are once again on the rise. This fresh demand can naturally be bullish for the cryptocurrency’s value.

BTC Price

Bitcoin surged above the $70,500 level earlier, but the coin has since slumped back down, now trading around $67,800.