The MVRV ratio of Bitcoin (BTC) has fallen below its 90-day average, suggesting that a price rally is imminent, with the potential for a significant 67% increase.
Market expert Ali Martinez highlighted this positive development in a recent post on X. Notably, data from Glassnode confirms that the 90-day average of the Bitcoin MVRV ratio has been steadily increasing.
Interestingly, while the 90-day average has been on the rise, the actual MVRV ratio has experienced occasional fluctuations, mirroring Bitcoin’s real-time market performance. The MVRV ratio compares Bitcoin’s market value to its realized value.
To provide context, Bitcoin’s market value represents its current price on exchanges, while realized value reflects the total cost basis of Bitcoin holders, based on the price at which BTC tokens were last transacted on-chain.
When the MVRV ratio gradually decreases, it indicates bearish sentiment, suggesting that the market value of Bitcoin is declining relative to its realized value. Glassnode data shows that the metric has been declining since BTC dropped from its all-time high of $73K on March 13.
BTC MVRV Ratio Falls Below 90-Day Average
However, amidst this decline, the ratio has now dropped below the 90-day average, a situation that Ali has identified as a bullish sign. Citing market data, Ali revealed that this occurrence has happened four times since January 2023, and on each occasion, it preceded a market upswing, with an average surge of 67%.
The market analyst believes that this upswing will happen again this time, especially considering the recent Bitcoin halving. If the average uptrend rate of 67% occurs, it would push Bitcoin’s price to $110,409, marking a new all-time high. However, it remains to be seen if the leading cryptocurrency can achieve this milestone.
Bitcoin Support and Resistance Levels
With Bitcoin struggling to maintain its position above $66,000, Ali emphasized in a subsequent analysis that it is aiming to establish strong support at this price level. With Bitcoin currently trading at $66,176, the analyst highlighted the $66,048 price as a potential support level.
Notably, this price point represents a demand wall where 1.54 million addresses hold 747,000 tokens. According to Ali, if Bitcoin successfully establishes support at this price level, it will then target breaking through the sell wall between $69,900 and $71,200, where over 1 million addresses hold 444,410 BTC.
However, despite the recent surge, the bulls must remain resilient against any drops below the April 19 lows of less than $60,000. IntoTheBlock revealed today that BTC has a significant demand wall at the $64,800 level, with over 1.66 million addresses located in this crucial demand zone.
Amidst the latest rebound, Bitcoin has surpassed the 50-day EMA at $64,640, signaling a bullish shift in short-term momentum. The Binary CDD and Exchange Reserve metrics further support the bullish sentiment, with the Binary CDD indicating limited movement by long-term holders and the Exchange Reserve confirming that investors continue to withdraw their BTC tokens from exchanges.
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