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Highlights
- Bitcoin's realized cap hits a record $900 billion as long-term holders cash in on profits, signaling strong market activity amid a price rally.
- The MVRV ratio enters the "euphoria zone" at over 3.2 for long-term holders, hinting at a potential market top and increased volatility.
- Analyst Michaël van de Poppe predicts a shift as Bitcoin dominance weakens, with altcoins possibly set for a value surge soon.
The recent surge in Bitcoin’s (BTC) price has led to a significant change in investor behavior. Long-term holders have started taking profits, causing the market’s realized value to reach a new all-time high.
MVRV Ratio Signals Potential Bitcoin Sell-Off
Data from Glassnode shows that BTC’s realized cap has surpassed $900 billion for the first time. This peak value indicates that investors are locking in gains after holding onto their assets for many months. Many long-term holders are in a strong profit position following the latest BTC price rally.
Also, the market value to realized value (MVRV) ratio has entered what analysts call the “euphoria zone.” The ratio measures whether investors are sitting on unrealized gains, while this zone is a phase where investor profit-taking reaches extreme levels.
This ratio is over 3.2 for long-term Bitcoin holders, like Michael Saylor’s Strategy, which just bought 4,020 BTC, suggesting that, on average, their coins are worth over three times the purchase price. Such levels are often a sign that a market top is close. Hence, investors reduce their risk by selling a large percentage of their holdings.
In addition, the MVRV ratio for those who bought BTC within the last five months (short-term holders) is more than 2.0. This shows that these investors are also seeing significant profits.
Source: Glassnode
Ethereum Lags Behind as Bitcoin Dominance Fuels Volatility
Meanwhile, there hasn’t been the same level of momentum for Ethereum compared to Bitcoin. The legend price, which refers to historical support and resistance levels, has displayed slight gains, contrasting with the BTC price’s massive rally.
This difference highlights how BTC dominates investor attention, especially through institutional demand with spot Bitcoin ETFs.
This market phase displays the classic cycle of a massive price rise, which causes long-term investors to start securing profits. Although the metrics don’t indicate that a crash will happen soon, they suggest that the market may be entering a more volatile period soon.
Altcoins Await Turnaround as BTC Dominance Wanes
Meanwhile, popular crypto analyst Michael Van de Poppe has stated that the bear market for altcoins isn’t over yet. However, Van de Poppe noted that there’s a strong bearish divergence in BTC’s dominance.
This means there’s a gradual weakening of Bitcoin’s share of the total cryptocurrency market. Hence, the analyst predicts that a shift could be imminent, with altcoins rising in value. Van de Poppe also notes that the dip (circled in red) marks the end of the bear market previously, and a similar turnaround could be near.
Source: X (@CryptoMichNL)
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