Bitcoin MVRV Ratio Has Been Going Up In Recent Days
As explained by an analyst in a CryptoQuant , the 1.5 level of the metric has held significant importance in the past. The “MVRV ratio” is an indicator that measures the ratio between the market cap of Bitcoin and its realized cap.
The “realized cap” here refers to a capitalization model for BTC that assumes that each coin in the circulating supply has its real value the same as the price at which it was last moved or transferred on the blockchain.
Looks like the value of the metric has observed a rapid rise recently | Source:As you can see in the above graph, the quant has highlighted the relevant portions of the trend for the Bitcoin MVRV ratio. The region below 1, as mentioned earlier, is the undervalued zone where bottoms have historically formed for the coin. Cyclical tops, however, haven’t generally formed in the zone above 1, but rather at much higher values like 3 or more.
This time, however, after sideways movement around the level, the indicator eventually plunged below it as the market crash due to the LUNA collapse occurred.
The decline also continued later with the Three Arrows Capital (3AC) collapse, and the metric found itself inside the undervalued region again. The ratio spent a while in this zone until the latest rally came and finally pulled it out of there. This escape above the region may suggest that at least the worst of the bear market may be over for now. With the sharp rise in BTC recently, the MVRV ratio has also naturally continued to go up and is now approaching the 1.5 level which it had multiple encounters within the last few years. It’s possible that the coin could find resistance here and be rejected back downwards. The quant believes, however, that if a breach does happen here, then Bitcoin might be able to sustain its bullish momentum.BTC Price
At the time of writing, Bitcoin is trading around $28,600, up 4% in the last week.BTC has sharply gone up over the last two days | Source: