Can Bitcoin Buyers Join The Breakout Party? Analyst Says Not Yet
18 Apr 2026 · 19:00 UTC · NewsBTC RSS Feed · Original source
Read original at NewsBTC RSS Feed →
Summary
Bitcoin has rallied 11% and broken through resistance levels, drawing interest from market participants considering re-entry. However, on-chain analyst GugaOnchain cautions that this may not be the optimal time to buy. Analysis of the MVRV ratio shows Bitcoin's recent upward move has gained validity—the ratio stands above its 30-day moving average at 1.2947, and the Binance Bitcoin Taker Buy/Sell Ratio confirms increased buying aggression. However, the current MVRV reading of 1.3856 remains significantly below the 365-day SMA at 1.8620, indicating the market hasn't reached an overheated phase. From a technical perspective, Bitcoin's RSI has climbed to 67.85, approaching the overbought threshold of 70. The analyst predicts a near-term pullback following the breakout, with potential support levels between $65,000-$70,000. The recommended strategy is to avoid buying at current resistance levels but instead to accumulate during the subsequent retracement. Bitcoin is currently trading around $77,014, up 2.8% over the previous day.
Why it matters
The analysis relies on three key mechanisms: (1) MVRV ratio tracking unrealized gains to indicate market valuation extremes—currently elevated short-term but not at cycle highs; (2) RSI as an overbought indicator suggesting mean reversion is likely in the near-term; (3) Technical channel breakouts followed by corrections as a typical market pattern. The analyst's bullish-yet-cautious stance reflects contradictory signals: momentum indicators (price breakout, buying volume) suggest upside continuation, while oscillators (RSI 67.85) suggest mean reversion risk. The predicted support zone ($65k-$70k) represents approximately 8-16% downside from current levels, a significant but not catastrophic pullback. Key uncertainties include: whether the correction will be shallow or deeper, what macroeconomic factors might accelerate or prevent the move, and whether altcoins experience correlated or exaggerated declines. The analyst's framework is sound, but technical predictions have inherent limits—unexpected news or liquidation cascades could accelerate moves.
Expected impact
The on-chain analysis suggests Bitcoin's recent 11% breakout is valid in the short-term, as evidenced by the MVRV ratio rising above its 30-day average and increasing buying pressure on Binance. However, the technical picture indicates an imminent pullback, with RSI reaching 67.85—near overbought levels at 70. The analyst expects Bitcoin to retrace to support levels between $65,000-$70,000 before resuming an uptrend. This creates a two-phase impact: near-term volatility as traders react to overbought signals, followed by a correction phase. Since the MVRV ratio remains well below the 365-day moving average (1.3856 vs. 1.8620), the analyst suggests the market hasn't reached macro overheating, indicating long-term upside potential after the pullback. Altcoins, which typically amplify Bitcoin movements, would likely experience sharper declines during the correction phase. The immediate impact would be heightened volatility across both BTC and altcoins as position liquidations occur, while longer-term impacts depend on whether Bitcoin successfully holds the predicted support levels.