Bitcoin Price Recovery Hinges On This Key Market Indicator, Reveals Analyst
September 14 2024 - 3:00AM
NEWSBTC
The crypto market has recently seen some ups and downs, with
Bitcoin facing many fluctuations. According to a recent post by a
CryptoQuant analyst known as ‘Kripto Mevsimi,’ the Bitcoin Market
Value to Realized Value (MVRV) ratio has dipped below its 365-day
moving average. This specific indicator often identifies potential
market bottoms and zones where recovery could begin. While the drop
in MVRV could suggest an “opportunity for long-term investors,” the
analyst warns that caution is needed. Related Reading: Bitcoin’s
Leverage Ratio Hits New High: What Does This Mean BTC? Bitcoin Will
Recover If Its MVRV Does This The MVRV (Market Value to Realized
Value) ratio is a metric used in cryptocurrency to assess whether
an asset, like Bitcoin, is overvalued or undervalued relative to
its “realized value.” Market Value refers to the asset’s current
price multiplied by its total circulating supply, essentially the
market capitalization. Realized Value is calculated by summing the
value of each coin at the price it was last moved on-chain, giving
a picture of what the network participants paid for their holdings.
According to Mevsimi, historically, when the Bitcoin MVRV ratio
breaks back above its 365-day average, it has been followed by a
renewed sense of optimism in the market, often signaling the start
of a “more sustainable upward trend.” However, the current economic
environment, marked by ongoing macroeconomic uncertainties,
suggests that Bitcoin’s recovery could take longer. In the
meantime, the analyst advises investors to maintain a balanced
outlook, noting: Therefore, maintaining a measured and balanced
perspective is essential. A positive outlook is understandable, but
it should be tempered with awareness of the broader risks until the
MVRV ratio confirms a more sustained upward momentum. Related
Reading: 11% Of Bitcoin Supply In Coinbase’s Hands: Analyzing The
Potential Risks Buy Signal Identified In BTC Meanwhile, Despite the
current state of the MVRV ratio, Bitcoin’s price has shown some
signs of recovery in as of today. After briefly dipping below the
$58,000 mark earlier in the day, the asset has reversed its
trajectory, gaining 1.2% to reach a price of $58,463 at the time of
writing. Crypto analyst Mags took to X to highlight a key bullish
signal: the Bitcoin hash ribbon. According to Mags, the Bitcoin
hash ribbon indicator has flashed a buy signal, historically one of
the “most reliable” indicators for Bitcoin’s price movement. Mags
mentioned that every time this signal appeared, it was followed by
a significant price surge, giving traders reason to believe that
Bitcoin could see a bullish breakout soon. #Bitcoin – hash ribbon
flashed a buy signal. Historically, this has been one of the most
reliable indicators for Bitcoin. Every time we’ve seen this signal,
it’s often followed by a massive pump in BTC!
pic.twitter.com/hXFLkTKXTH — Mags (@thescalpingpro) September 13,
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