Bitcoin Nears Two Important On-Chain Levels: What Happened Last Time
April 09 2024 - 10:00PM
NEWSBTC
Data shows Bitcoin is currently nearing two notable on-chain price
levels. Here’s what happened the last time BTC broke above them.
Bitcoin Is Approaching Vaulted Price & MVRV +1SD Currently In a
new post on X, Glassnode leads on-chain analyst Checkmate points
out that BTC has been near two on-chain price levels recently. The
first of these levels is the “MVRV +1SD.” The Market Value to
Realized Value (MVRV) ratio is a famous indicator for Bitcoin. In
short, it compares the value that BTC holders are currently
carrying (that is, the market cap) against the value they put into
the cryptocurrency (the realized cap). Related Reading: Bitcoin 40%
Of Way Through Bull Run If This Metric Is To Go By This metric is
generally used to determine the scale of profit or loss that the
market as a whole is carrying right now. Based on this, the
fairness of the coin’s price may be judged. In the context of the
current discussion, the +1 standard deviation (SD) of the MVRV
ratio from its mean is of relevance. More specifically, the price
level at which the market would satisfy this MVRV ratio condition
is of focus. The other on-chain level of interest here is the
“Vaulted Price.” This indicator is a product of the “Cointime
Economics” framework that Checkmate came up with alongside David
Puell from Ark Invest. In reference to this metric, the paper
reads: Vaulted Realized Price may be considered to be a pricing
level that reflects the ‘potential energy’ stored in the system.
Somewhat counter-intuitively, the more long-term coin accumulation
that takes place, the larger the uncertainty becomes between the
proportion of truly lost vs. HODLed supply. Vaulted Realized Price
will trade lower in this instance, as more cointime accumulation
takes place, and uncertainty regarding future distributive pressure
builds (and vice-versa). Now, here is a chart that shows the trend
in these two indicators, as well as some other “original” on-chain
levels, over the past few years: Looks like the asset has been near
these two levels in recent weeks | Source: @_Checkmatey_ on X As
displayed in the above graph, the Bitcoin spot price earlier broke
through the Vaulted Price and went to the MVRV +1SD (note that the
labeling is flipped in the chart by mistake, as Checkmate has noted
in reply to the post). Since then, the price has come down a bit
and is trading under both of these levels. Nonetheless, it
currently stands quite near to them and far above the other
on-chain price levels like the realized price. Related Reading:
Polygon (MATIC) In Buy Zone That Earlier Led To 112% & 87%
Surges As the chart highlights, the last time cryptocurrency was in
this situation was December 2020. Obviously, what followed then was
the bull run of 2021. It remains to be seen how Bitcoin’s
interactions with these levels will be this time around and whether
a similar euphoric run will follow with a potential break above
them. BTC Price Bitcoin had shot up above the $72,000 mark earlier,
but it has since slumped back again, and it’s now floating around
$69,000. The price of the asset appears to have plunged over the
past day | Source: BTCUSD on TradingView Featured image from Yiğit
Ali Atasoy on Unsplash.com, checkonchain.com, chart from
TradingView.com
Polygon (COIN:MATICUSD)
Historical Stock Chart
From Sep 2024 to Oct 2024
Polygon (COIN:MATICUSD)
Historical Stock Chart
From Oct 2023 to Oct 2024