Bitcoin Investors' Cooling Period Analysis

In recent days, the price movements of Bitcoin (BTC) continue to attract the attention of investors. In its long-term cycle, the mainstream cryptocurrency has entered a cooling phase instead of a peak. According to an assessment by a CryptoQuant analyst, the Bitcoin Combined Market Index (BCMI) has declined to 0.5 at the moment. Historical analysis of this level indicates that it is a balancing point in terms of market valuation, profit realization, and investor sentiment.

Bitcoin's price appears to be neither overly heated nor in a downtrend. According to data presented by the CryptoQuant analyst, the BCMI is comprised of four key metrics: MVRV (30%), NUPL (25%), SOPR (25%), and Fear & Greed Index (20%). Returns to this level during the 2020 and 2024 cycles had typically occurred before a new bullish momentum. The analyst notes that these levels reflect a phase where excessive speculation has cooled down and on-chain value has reset.

Currently, the MVRV ratio is at 1.8, indicating that the market is still far from the overvaluation area (above 3.0). The SOPR is at 1.02, showing that profit-taking is balanced. Additionally, the Fear & Greed Index has decreased from 75 to 60 in recent weeks, indicating that investors have entered a "cooling" process. A turnaround from this region could herald new peaks.

According to the CryptoQuant analyst, if the BCMI rises from 0.5 to 0.6, it will indicate that market momentum has regained strength. However, if it drops below the 0.45 level, Bitcoin is expected to enter a consolidation phase for a while longer. In summary, the BCMI level of 0.5 indicates that the market is neither overheated nor collapsed. Bitcoin is currently just cooling down.