Bitcoin MVRV Ratio Is Nearing In On The 1.2 Level
As an analyst in a CryptoQuant Quicktake 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.
The value of the metric seems to have been going down in recent days | Source: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. 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: