What do Bitcoin’s mid-cycle metrics tell us about its next price rally?

• IBCI stabilized mid-cycle while the valuation ratios signaled that BTC may be undervalued
• Miners reduced their sell pressure as Bitcoin’s price held on to its ascending support

Bitcoin’s [BTC] market structure, at the time of writing, appeared to be intact as the IBCI consolidated near the 50% zone – A region historically seen between exhaustion and new impulses. 

In fact, after peaking above 75% in early 2024 and briefly pulling back, the Index Bitcoin Cycle Indicators (IBCI) is now at a neutral midpoint. 

Such a zone often alludes to a pause rather than a peak, especially when supported by recovering prices. 

At press time, Bitcoin was trading around $105,571, while maintaining a healthy distance from overbought levels. This might further reinforce the thesis that the market could be transitioning – Not topping.

Source: CryptoQuant

BTC rides ascending channel as bulls guard critical structure

Despite the latest pullback, Bitcoin has continued to respect the ascending channel formed since April. The price action remains above the key midline support, while resistance near $112,000 might be looming just ahead. 

The Relative Strength Index (RSI) seemed to be hovering between 49.89 and 53.14, suggesting a lack of directional bias. Moreover, the trendline was unbroken, indicating buyer confidence. 

Therefore, as long as the structure holds, the potential for higher highs will be valid. Particularly if bullish catalysts return.

Source: TradingView

On-chain valuation metrics crash – Bullish divergence or red flag?

The Network Value to Transaction (NVT) ratio dropped by 52.62% to 33.87 and the Network Value to Metcalfe Ratio (NVM) fell 43.35% to 2.49. These steep declines usually imply that the market capitalization may be undervaluing the actual transaction activity and user base expansion. 

Historically, sharp drops in these ratios have preceded significant rallies as they reflect a market underpricing on-chain utility. 

Therefore, this hidden divergence may be fueling optimism among long-term investors seeking to enter before valuations normalize again.

Source: CryptoQuant

Are declining stablecoin reserves really a bearish signal?

At the time of writing, the Exchange Stablecoin Ratio stood at 5.60 after a 2.38% drop – Hinting at a slight reduction in stablecoin liquidity on exchanges. 

However, this isn’t necessarily bearish. While it may allude to a fall in immediate buying power, the broader reserve levels remain healthy enough to support large entries. 

In fact, consolidations often occur before inflows resume. Therefore, unless the ratio sharply breaks lower, the market will still possess enough capital to fuel a continuation of Bitcoin’s uptrend. 

Source: CryptoQuant

Miners retreat from selling as accumulation takes front seat

Miners’ Position Index (MPI) surged by 49.8%, settling at -0.88. This negative value signaled that miner outflows remained well below the 1-year average. 

Historically, such behavior has aligned with holding sentiment and declining sell pressure. As miners are key liquidity providers, a fall in selling from this group is often bullish. 

Therefore, the surge in MPI, despite the negative value, confirmed a favorable condition for price resilience. Especially when supported by other bullish metrics.

Source: CryptoQuant

With the IBCI stabilizing mid-cycle, technical structure intact, and key metrics flashing undervaluation, Bitcoin may be poised for further upside.

The absence of miner selling, solid liquidity, and low valuation ratios collectively suggested that the ongoing pause could evolve into another rally leg. If the structure holds and macro trends remain stable.