Crypto Analyst Says Bitcoin Will Rise To $79,600 If This Holds
June 03 2024 - 1:00PM
NEWSBTC
An analyst has explained how Bitcoin will “likely rise to test” the
$79,600 level if BTC can hold above this important level of a
pricing model. Next Bitcoin MVRV Pricing Band Is Currently Valued
At $79,600 In a new post on X, analyst Ali Martinez has talked
about where BTC’s next destination could be based on an on-chain
pricing model. The model uses the popular “Market Value to Realized
Value” (MVRV) indicator. This metric tells us how the value that
the Bitcoin investors hold right now (that is, the market cap)
compares against what they put in (the realized cap). Related
Reading: Ethereum Investors Take On Sky-High Leverage: Brace For
Volatile Storm? When the value of this indicator is greater than 1,
it means that the holders as a whole are carrying a value higher
than their initial investment; that is, they are in net profits. On
the other hand, the MVRV being less than this threshold implies
that the overall market is underwater at the moment. There are a
couple of pricing models based on this metric, but in the context
of the current discussion, the “MVRV extreme deviation pricing
bands” are of interest. This model’s standard deviations around the
MVRV mean signify the relevant price levels. Below is a chart that
shows how these levels currently look for Bitcoin. As the graph
shows, Bitcoin is currently trading above the +0.5σ pricing band.
At the price level corresponding to this 0.5σ level ($66,800 right
now), BTC’s MVRV value becomes 0.5 standard deviations above its
mean value. According to this model, the next level of interest is
the +1σ, where the MVRV is 1 standard deviation over its mean. The
price level at which the MVRV ratio would satisfy this condition is
$79,600. Historically, tops in the cryptocurrency have tended to
form when the price breaches past this MVRV pricing band level.
From the chart, it’s visible that BTC surpassed this level earlier
in the year when it set its new all-time high, which continues to
be the peak of the rally so far. Related Reading: Bitcoin ‘Realized
Volatility’ Showing Very Rare Trend: What Could Be Next Ali
suggests that if Bitcoin can continue to hold above $66,800 (the
+0.5σ pricing band level), the asset will “likely rise to test the
1.0σ pricing band at $79,600.” A potential rally to this level
would imply an increase of more than 14% for BTC from its current
price. Why do tops tend to be more probable to happen above the +1σ
MVRV pricing band? The reason could lie in the fact that when the
MVRV attains values this high, the investors are holding
considerable profits, so they are more likely to participate in a
mass selloff. BTC Price Bitcoin witnessed a retest of the +0.5σ
pricing band earlier, but the level has continued to hold so far,
as the coin has rebounded to $69,500 since then. Featured image
from Dall-E, Glassnode.com, chart from TradingView.com
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