Crypto analysis firm IntoTheBlock found that an important metric Bitcoin He says it shows that (BTC) has entered the early stages of the bull market cycle.
In a new post, the firm says BTC’s market cap-to-realized value (MVRV) ratio behaves similarly to previous bear-bull market transitions.
When the MVRV ratio drops below 100%, it indicates that holders of Bitcoin are priced lower than the average purchase price. Bear markets tend to bottom out when MVRV drops to 70% to 80%, which represents a buying opportunity. In addition, each time MVRV rose above 100% after falling below it signaled the beginning of a bull market.
By this measure, Bitcoin’s bull market began in January of this year and may have more room to appreciate if it reaches the 300%+ levels in MVRV seen towards the end of previous bull markets. Overall, on-chain indicators suggest that Bitcoin is in the early stages of a bull market.
NEWS CONTINUES BELOW
MVRV is the ratio of an asset’s market value to its realized capitalization – the value of all Bitcoins at the price they were purchased, not at the current price – and aims to capture market bottoms and tops.
However, IntoTheBlock warns that there is a possibility that the previous MVRV and BTC market patterns may not be repeated this time.
As a result, while previous models do not guarantee Bitcoin returns, the alignment of positive supply and demand catalysts increases the likelihood of another Bitcoin cycle occurring.
Koinfinans.com As we reported, Bitcoin is trading at $33,841 at the time of writing.