- Long-term holders continue to drive Bitcoin’s rally as retail wallet activity remains near multi-year lows.
- NVT Ratio and HODL Waves back the BTC bullish trend, but their levels hint at potential overvaluation ahead.
Bitcoin’s [BTC] price has reached new yearly highs near $111K, yet the number of small investor addresses holding less than 1 BTC has dropped sharply from 590,000 in 2021 to just 260,000 today.
This decline points to a lack of excitement among everyday investors, even as price action strengthens.
Large investors and long-term holders are driving this rally, not retail buyers. Naturally, the breakout’s reach remains limited unless smaller players return to the market.
Is Bitcoin’s breakout above $110K truly sustainable?
Bitcoin has successfully cleared the high-congestion supply zone between $105K and $110K. At press time, it traded at $110,510.
This marks a major technical breakout, pushing the price above resistance that previously triggered rejections.
However, the RSI on the daily chart has climbed above 77, signaling overbought conditions. Typically, such readings prompt a cooldown.
Yet, bullish trends can persist in this range during strong uptrends. Therefore, the breakout may hold if demand remains steady, especially if profit-taking pressure stays limited.
Source: TradingView
Has BTC cooled off enough as the NVT Golden Cross dips?
The NVT Golden Cross dropped by 49.46%, resting at 0.79, at press time. This signals that Bitcoin’s price is not outpacing on-chain transaction value as aggressively as before.
In previous cycles, such a drop reduced the likelihood of short-term tops. Therefore, this dip lowers the risk of overheating and supports a healthier rally.
Source: CryptoQuant
Meanwhile, Weighted Sentiment spiked to 5.15—an extremely high level, reflecting crowd euphoria. Historically, such elevated sentiment often precedes consolidation or reversals, especially if it lacks retail confirmation.
Unless supported by retail traction, such sentiment spikes tend to unwind. Traders should be alert for short-term corrections if momentum slows.
Is BTC becoming overvalued as the NVT ratio skyrockets?
The NVT ratio surged to 374.17, which indicated a growing disconnect between Bitcoin’s Market Cap and its Transaction Volume.
Elevated NVT levels often point to overvaluation, especially when not supported by rising network activity.
Therefore, this metric suggests caution. If transaction volume fails to catch up, the market could face valuation-based pullbacks.
Still, in bull markets, the NVT Ratio can remain high for long periods. That makes it a caution flag, not a full stop.
Source: Santiment
Are holders signaling long-term belief as short-term speculation fades?
Realized Cap HODL Waves (0–1 day) dropped to just 0.33, indicating that recent activity is not driven by short-term flippers. This metric reflects minimal movement from new buyers, meaning long-term holders dominate the current market.
Historically, low wave activity correlates with strong hands and supports sustained uptrends.
Therefore, this suggests that the rally has a solid foundation, at least for now.
Source: Santiment
Combined with the reduced NVT Golden Cross, the conviction of holders strengthens the bullish case despite other mixed signals.
Bitcoin’s breakout and strong on-chain support show promising signs. However, the absence of retail participation creates a ceiling for potential exponential growth.
Until shrimp wallets return in force, the rally might remain slower and more dependent on whales and institutions.
