[Analysis] "Despite sharp rises in Bitcoin and Ethereum prices... On-chain indicators warn of overheating"

Bitcoin (BTC) hit a record high last week, and Ethereum (ETH) also neared its all-time high, yet analysis shows that on-chain indicators are signaling overheating.

According to cryptocurrency-focused media outlet Coindoo on the 17th, on-chain analytics firm Santiment pointed out in a recent report that "Bitcoin trading volume peaked last month and has since turned downward, showing signs of bearish divergence." The report explained that network activity, including the number of daily active addresses, is also slowing, raising questions about the sustainability of the current price range.

In particular, the MVRV (Market Value to Realized Value) indicator is cited as a risk factor. The long-term MVRV for Bitcoin remains at around 21%, suggesting that the upside potential is limited. For Ethereum, the 90-day MVRV has surged to 40% and the 365-day MVRV to 57%, warning that downward adjustment pressure may arise.

Nevertheless, buying by whale investors continues. According to Santiment, wallets holding 10 to 10,000 BTC have been consistently accumulating since March, and buying by smaller retail investors has also been observed at the same time. Santiment explained, "A phase in which both whales and retail investors are buying simultaneously often leads to a short-term correction."

Additionally, Santiment interpreted the sharp rise in mentions of 'Buy the dip' on social media as a sign of excessive optimism in market sentiment. The report added, "With the combination of slowing fundamentals, high MVRV indicators, and excessive investor sentiment, caution is needed in the short term."