Five Warning Signs Bitcoin's Price Could Be Heading for a Crash, According to CryptoQuant

As Bitcoin continues to surge, hitting record highs above $94,100 on Nov. 19, analysts are cautioning investors to remain vigilant. Onchain analytics firm CryptoQuant has identified five critical indicators signaling when Bitcoin’s price may be nearing a peak. One of these indicators has already started flashing red.

1. MVRV Ratio: A Key Valuation Metric

The MVRV Ratio measures Bitcoin's market value (total valuation of all mined BTC) against its realized value (based on the latest selling price of BTC in circulation).

CryptoQuant highlights that when the MVRV ratio surpasses 3.7, Bitcoin typically hits a local price peak. While the ratio currently stands at 2.67—a comfortable distance from the danger zone—investors should closely monitor this metric. Historically, the ratio soared to 7 during Bitcoin’s $60,000 rally in February 2021, signaling overvaluation.

2. Fear & Greed Index: Overheating Market Sentiment

The Fear & Greed Index, a measure of market sentiment, is another critical warning sign. When the index hits 80 out of 100, Bitcoin may approach a local top, especially if other indicators align.

The index has remained above 80 since Nov. 12, peaking at 90 on Nov. 17 and Nov. 19—the highest levels since February 2021. Such elevated scores often indicate overheated market conditions and potential corrections.

3. New Money Inflows: Sustaining the Bull Run

For Bitcoin’s bull run to continue, significant new money inflows are crucial. Without fresh capital entering the market, price momentum can stall, leading to pullbacks.

CryptoQuant’s Realized Cap Growth Chart, which tracks new money inflows, indicates that the market is still in a bullish phase. Current inflows remain strong, providing support for Bitcoin’s recent rally.

4. Coin Days Destroyed: Long-Term Holders Taking Profits

The Coin Days Destroyed (CDD) metric assesses whether long-term Bitcoin holders are selling their dormant coins. A sharp spike above 15–20 million on this indicator suggests that seasoned investors may be cashing out, which could lead to short-term price corrections.

As of now, the CDD score is 15.1 million, edging close to the cautionary threshold. This suggests that some long-term holders are beginning to sell their positions, a potential bearish signal.

5. Inter-Exchange Flow Pulse: Trader Activity on Derivatives Exchanges

The Inter-Exchange Flow Pulse (IFP) tracks Bitcoin movements between exchanges, particularly derivatives platforms where BTC is used as collateral.

Currently, the IFP is at 730,000, with an upward trend. This indicates that traders are actively moving Bitcoin for trading purposes, supporting the bullish market sentiment. During past bull runs, the IFP peaked at 1 million, while bear markets saw lows around 200,000.

Bitcoin's Record-Breaking Rally: What Lies Ahead?

Bitcoin’s price has been on a relentless upward trajectory, driven by factors such as renewed market optimism and institutional interest. Its latest peak of over $94,100 coincides with heightened speculative activity and increasing adoption.

Despite warnings from CryptoQuant, some analysts remain optimistic. Matthew Sigel, VanEck’s head of digital assets research, predicts Bitcoin could reach an astonishing $180,000 in 2025.

Key Takeaways for Investors

While Bitcoin's current momentum seems unstoppable, the five indicators highlighted by CryptoQuant provide a framework for assessing potential risks:

1. Monitor the MVRV Ratio for signs of overvaluation.

1. Pay attention to the Fear & Greed Index for overheated sentiment.

1. Ensure new money inflows remain strong to sustain the rally.

1. Watch for spikes in Coin Days Destroyed, signaling long-term holders selling.

1. Track the Inter-Exchange Flow Pulse to gauge trader activity and market liquidity.

As Bitcoin continues to set new records, these warning signs offer valuable insights to help investors navigate the volatile cryptocurrency market.

Whether Bitcoin will maintain its bullish trajectory or face a significant correction remains to be seen.