Share this article
This Blockchain Indicator Might Show Bitcoin Rally Has Legs
Historically, the periods the MVRV ratio has dropped below 1.0 have been some of the best times to invest in BTC, according to Coin Metrics.
Updated Mar 6, 2023, 3:10 p.m. Published Mar 16, 2021, 8:03 p.m. 1 min read
Bitcoin’s price has nearly doubled this year, but the rally could have room to run. That’s based on a new report by Coin Metrics, a cryptocurrency data firm, which shows bitcoin (BTC) is not at an extreme relative to the previous market top in 2018.
The MVRV ratio is a measure of bitcoin’s market value relative to its realized value. The gauge represents the difference between the cryptocurrency's current price and the average price at which bitcoins were acquired. When it reaches an extreme, the thinking goes, traders might be inclined to take profits, creating sell pressure that could push price down.
- The near 20% bitcoin sell-off from an all-time-high around $60,000 last week triggered a decline in the MVRV ratio to 0.88.
- “Historically, the periods that MVRV has dropped below 1.0 have been some of the best times to invest in BTC,” according to Coin Metrics.
- The MVRV indicator reached an extreme around 4 in 2018, and near 6 in 2014, just prior to the start of bear markets.
More For You
A massive selloff in a SpaceX crypto token wiped out hundreds of retail traders in 30 minutes because the market lacked enough cash to absorb the shock.
What to know:
- A violent 45% flash crash wiped out hundreds of retail traders when a SpaceX-linked crypto contract plummeted in just 30 minutes, wiping out $1.51 million in value and catching small-time investors completely off guard.
- The market was too thin to handle one massive trade because the token lacked deep financial...
Top Stories
