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- 1 The Bitcoin MVRV ratio stands at 1.27 suggesting an optimist indication for BTC bulls.
- 2 Bitcoin rose nearly 2% in the last 24 hours and traded at $26,250 at press time.
Bitcoin (BTC) price has been trading in the range of $31,000 to $25,000 for the past several months. Mostly, BTC sustained below $30,000 and it stayed even below $27,000 for the majority of the last month. Despite the trading price of crypto assets signaling the bearish sentiment, some crucial indicators are in favor.
Crypto analytics platform IntoTheBlock brought crucial insights related to the MVRV ratio of Bitcoin. It noted that the MVRV ratio for Bitcoin is at 1.27, which is considered to be a significant level in comparison to the past levels. The ratio is treated as an important indicator that helps in identifying the highs and lows of an asset’s price.
“When the value is <1, it signals that most people are at a loss. Historically, this has indicated the best buying opportunities,” it noted.
To define the MVRV ratio, the market capitalization of any asset is divided by the realized capitalization. It can also be considered as the proportion of the current price of an asset to its average price at the time of purchase.
As the analytics platform put it, the value of a ratio below 1 suggests the buyers’ loss. But this is also interpreted as a signal to buy the asset. On the flip side, the increasing ratio suggests the buyers sit at considerable profits and it is usually followed by a sell-off in the efforts of profit bookings.
Current MVRV Level Crucial for Bitcoin
According to CryptoQuant data, the level of 1.2 has consistently served as a critical support level. Historical data shows that when this level was attained, Bitcoin prices tended to rise. While when it was breached, prices typically declined further.
The value of 1.27 at the time was somewhat uncertain, resembling a 50:50 situation. Bullish traders using leverage were looking for a significant rebound from this level, while bearish leveraged traders were anticipating the opposite outcome.
During the period when Bitcoin’s short-term movement was closely tied to the mentioned support line, there was a notable increase in activity from whale investors, particularly in terms of their interactions with cryptocurrency exchanges.
At the time of writing, Bitcoin was trading at $26,216 according to CoinMarketCap. In addition to the heightened whale activity, the overall market sentiment for the leading cryptocurrency appeared to have shifted positively, as indicated by the positive values of the weighted sentiment indicator.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
