Bitcoin (BTC) Becomes Overvalued As Network Activity Begins To Decline

Bitcoin (BTC) becomes overvalued as network activity begins to decline. Bitcoin’s price recently surged above $100,000 before settling near $98,000. This rally excited many investors. However, blockchain data tells a different story. Bitcoin’s transactional activity has dropped to its lowest level in the past year. This decline casts doubt on its current valuation. According to Metcalfe’s law, Bitcoin’s fair value should range between $48,000 and $95,000. The cryptocurrency now trades well above this range, suggesting it is overpriced.

I AM TURNING BEARISH 🚨🚨🚨

But only in the short term

Bitcoin is failing to gain momentum and takes days to recover from this.

I think we’re going to retest the lows and liquidate some more longs before we can stabilize and have a healthy recovery.

I am selling some stuff.… pic.twitter.com/Tnb8GUbYLG

— Tryrex (@Tryrexcrypto) February 8, 2025

Traditional valuation bands have long guided market expectations. Since February 2024, Bitcoin’s price has mostly stayed within these limits. The current speculative markup further supports caution. In addition, daily active addresses have steadily decreased. The Market Value to Realized Value ratio is also trending downward. These weakening metrics indicate that Bitcoin’s fundamentals are faltering. Analysts now predict a bearish trend. Overall, the evidence points toward an imminent market correction. Investors should remain extremely cautious as current market signals strongly indicate further volatility.

Key BTC Levels To Watch – February 9

BTCUSD is trading below the $98,400 resistance and forming lower highs, confirming a bearish trend. The MACD histogram remains in negative territory, signaling weak momentum and potential further downside. A breakdown below the $95,900 support could accelerate selling pressure toward the $85,000 level. Any short-term recovery may face resistance at $100,000 before resuming the bearish move.

Bitcoin Key Levels

Resistance Levels: $100,000, $109,360, $115,000, $125,000
Support Levels: $85,010, $66,780, $53,500

Bitcoin Metrics
Total Market Capitalisation: $3.13T
Bitcoin Market Capitalisation: $1.90T
Bitcoin Volume: $53.53B
Market Rank: #1

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