Bitcoin MVRV At Critical Support Line, Will Retest Be Successful?
06 September 2023 - 6:00PM
NEWSBTC
On-chain data shows the Bitcoin Market Value to Realized Value
(MVRV) ratio is nearing a retest that could be crucial for the
asset. Bitcoin MVRV Ratio Is Nearing In On The 1.2 Level As an
analyst in a CryptoQuant Quicktake post explained, the 1.2 level of
the MVRV ratio has historically been a support line for the
cryptocurrency. The “MVRV ratio” is an indicator that measures the
ratio between the Bitcoin market cap and the realized cap. The
“realized cap” here refers to a capitalization model for BTC that
assumes the real value of each coin in circulation isn’t the
current spot price but rather the price at which the coin was last
bought/transacted on the blockchain. As the realized cap considers
the cost basis or acquisition price of each investor in the market,
the model essentially represents the total capital that the holders
have put into the asset. Thus, comparing the market cap against the
realized cap in the MVRV ratio can provide hints about whether the
investors are holding more or less value than they put in. Related
Reading: Bitcoin HODLer Dominance Rises To Record Levels, Bullish
Sign? When the ratio’s value is greater than 1, it means that the
market as a whole is sitting on some profits right now. Generally,
the higher the MVRV goes above this mark, the more probable
corrections become for the asset as investors look to harvest their
gains. On the contrary, the indicator below this mark can signal
that BTC may be underpriced right now, as the average holder in the
sector carries coins at a loss. Now, here is a chart that shows the
trend in the Bitcoin MVRV ratio over the last few years: The value
of the metric seems to have been going down in recent days |
Source: CryptoQuant As is visible in the above graph, the Bitcoin
MVRV ratio has been above the 1 mark during the past few months.
The metric broke above this line in January when the rally started.
Besides a retest in March, the indicator has remained above this
level since then, implying that the holders have enjoyed profits.
Related Reading: Here’s What Will Happen If Bitcoin Can Break
$33,700 The 1 level has been important historically for the asset.
Still, the quant notes that another value is notable: 1.2. This
line has supported the asset a few times in the past, as the
analyst has highlighted in the chart (the yellow boxes). Most
recently, Bitcoin found support at this level in June, where the
cryptocurrency could propel itself back up with a sharp rally. The
metric is heading down and again approaching a retest of this line,
as its current value is 1.27. Naturally, a successful retest could
be positive news for Bitcoin, but a failure might lead to an
extended drawdown for the asset’s price. BTC Price As the chart
below shows, Bitcoin has continued to consolidate recently, with
the asset’s price still trading around the $25,700 level. BTC is
still displaying stagnant price action | Source: BTCUSD on
TradingView Featured image from Kanchanara on Unsplash.com, charts
from TradingView.com, CryptoQuant.com
Mina (COIN:MINAUSD)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Mina (COIN:MINAUSD)
Historical Stock Chart
Von Jul 2023 bis Jul 2024