Bitcoin ($BTC) seems to be preparing for upcoming major move with the growing bullish investor sentiment. As per CryptoQuant analysts, Bitcoin’s Composite Index 2.0 indicates the commencement of a new price rally. Bitcoin is currently trading at $96,204.
Bitcoin Composite Index Underscores Start of Next Bull Market
In line with Composite Index 2.0, Bitcoin is potentially poised for another notable price rally. The Composite Index denotes a combination of several on-chain indicators like dormancy flows, NUPL, and MVRV. It tracks the wider cycle shifts of Bitcoin’s price. Based on the historical data, when the Composite Index ratio surges above the 0.8 spot, it has severally denoted the start of key mid-cycle rallies or bull markets.
Rise and Sustenance above 1.0 Could Lead Bitcoin to Explosive Growth
While keeping in view the current market outlook of Bitcoin, the crypto analyst has presented 3 scenarios for next 6 months. These three market scenarios include Optimistic (Bull), Base Case (Consolidation), and Pessimistic (Correction). In the Optimistic case, the Composite Index ratio will effectively jump above 1.0 to subsequently sustain this level. Additionally, Bitcoin could witness massive growth as seen in the bull cycles of 2021 and 2017. In this respect, a resilient breakout could push prices toward the range between $150,000 and $175,000.
Staying Within the 0.8-1.0 Range Could Trigger Consolidation Period
Apart from that, the 2nd potential scenario for Bitcoin is the Base Case within the 0.8-1.0 range. As Bitcoin is currently hovering around the respective range, the ratio may maintain this position. In such a case, the next 6 months may see sideways price movement within the $90,000-$110,000. Normally, such a development takes place before wider-ranged breakouts or sometimes during mid-cycle cooling periods.
Dipping Below 0.70 Could Result in Profit-Taking
According to Axel Adler Jr., the 3rd possible scenario for Bitcoin in the next six months is Pessimistic. Thus, if the Composite Index ratio slumps below the 0.75 mark, it may lead to a profit-taking phase, specifically for short-term $BTC holders. As a result of this, Bitcoin’s price could plunge to the $70K-$85K range.