Bitcoin [BTC]: The rest of the month may not be fertile, here’s why

• BTC’s realized capitalization showed that the leading coin is now overbought.
• Assessment on the chain suggests a price disadvantage in the coming days.

According to CryptoQuant analyst Axel Adler Jrdue to the bullish nature of the general cryptocurrency market since the beginning of the year, the realized capitalization value of many assets has grown significantly in the last 20 days.

The calculation, which takes into account the production costs of each coin, gives a more accurate picture of the overall health of the market and is considered to be a better indicator of the true market sentiment towards a cryptocurrency.

Read Bitcoins [BTC] Price prediction 2023-24

However, an assessment of Bitcoins [BTC] Realized capitalization measurements over a single-day average revealed that the coin’s Stochastic RSI (Relative Strength Index) oscillator was in the overbought region.

Generally, an asset’s Stoch RSI oscillator presents overbought conditions when the asset has been trading at a relatively high price for an extended period of time, leading investors to believe that the asset is overvalued and due for a correction. According to Adler,

“This implies that a possible adjustment or decline in the market may occur in the near future.”

Source: CryptoQuant

The whales have fallen in

While BTC’s price fluctuated within a tight range over the past week, the chain analysis showed an uptick in transactions and accumulation among large investors.

According to on-chain data provider Santiment, the number of BTC whale transactions above $100,000 and $1 million has increased significantly during that period.

Source: Sentiment

Similarly, during intraday trading on February 3, a massive BTC transaction took place, marking the largest such transfer in the past four weeks.

A new whale address appeared, which went from zero to holding 13,369 BTC, valued at approximately $313.1 million, in a single transfer.

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🐳 8 hours ago, the biggest #Bitcoin the transaction in 4 weeks took place. This brand new whale suit went from nothing to suddenly holding ~13,369 $BTC (worth ~$313.1 million) after a single transfer. Follow this wallet here as prices fluctuate going forward. 👀 pic.twitter.com/G2IwLP0tpp

— Santiment (@santimentfeed) 4 February 2023

When the price of an asset starts to see a downside and the whales start to rally, it usually means that these large owners believe that the asset is undervalued and have started buying more of it. It is often taken as a bearish signal that may further reduce the value of such an asset.

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Furthermore, BTC’s social dominance has increased significantly in recent days. With the price hovering in a tight range, ready to break out in either direction, an increase in social dominance could mean the presence of euphoric feelings in the market.

Such highs in social activity without a corresponding rise in prices are often preceded by a price disadvantage.

Source: Sentiment

Finally, according to Coinglass, BTC’s open interest has been declining since the beginning of February. At $11.11 billion at press time, it has declined 2% since then.

Source: Coinglass