Bitcoin (BTC) Rebound Likely As MVRV Ratio Shows Ongoing Accumulation Phase
Highlights
- Bitcoin rebound is imminent according to CryptoQuant Analysts
- The confidence in this forecast hinges on historical MVRV trends
- After massive selloffs, BTC price is currently in rebound mode
Anticipation in some quarters within the cryptocurrency community had suggested a significant increase in Bitcoin’s price following its halving event. Despite the quadrennial event, the digital asset is yet to experience a substantial price rebound.
However, a recent analysis of the Market Value to Realized Value (MVRV) by Tarek On-Chain predicts that a rebound is likely for the foremost digital asset. As per CryptoQuant, a prominent on-chain data analytics provider, an in-depth look at the data provided by Tarek On-Chain gives insight into this potential rebound.
MVRV Significance in Bitcoin Price Rebound Push
Notably, the key indicator for long-term investors to consider is the Market Value to Realized Value ratio. This indicator is known for its high accuracy in signaling Bitcoin price tops and bottoms. An MVRV ratio below 2 indicates an ongoing accumulation phase, which suggests that the price is still undervalued.
However, when the ratio exceeds this value, it signals the approach of a new peak point for Bitcoin. As per historical precedence, market peaks have occurred when the MVRV ratio attains 3.5 or higher. It is at these levels that investors are advised to gradually exit the market. This is because it indicates that a peak has been reached or is largely imminent.
According to the data shared by Tarek On-Chain, currently, the MVRV ratio stands at 2.3. This points to the fact that Bitcoin still has considerable room for a price rise before it will attain its fair value. Even if there is a price decline, investors can take advantage of it to buy the coin in hopes of a potential price rebound.
Geopolitical Influences Shaping Market Sentiment
Analysts believe exiting the market should only begin when the MVRV ratio approaches 3. This suggests that there is a reasonable distance from the peak. Based on that, the prediction is that the price of Bitcoin will likely achieve a new high in this cycle, potentially surpassing $100,000.
Besides the MVRV ratio, a section of the market opines that geopolitical tension in the Middle East arising from the Israel – Hamas conflict and the ongoing Russia – Ukraine war could impact Bitcoin price. Notably, following the invasion of Ukraine by Russia in February 2022, Bitcoin price plummeted 67% in subsequent months reaching $15,476 in May 2022.
Spot Bitcoin ETF and halving event has helped reboot the price thus far this year. At the time of writing, BTC is up by 0.68% to $68,306.30.
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