Bitcoin's recent on-chain signal suggests another potential rally. This metric, known as the Market Value to Realized Value (MVRV) Ratio, has historically led to significant price increases, with the last four instances witnessing at least a 70% surge.
Ali Martinez, a noted analyst, highlighted this trend in a recent analysis. The MVRV Ratio is a measure comparing Bitcoin's market cap against its realized cap. Here, the realized cap considers each Bitcoin's last transaction price as its true value, differing from the fluctuating market cap calculated at current prices.
Essentially, it reflects the capital invested by stakeholders rather than the present market valuation.
Traditionally, an MVRV Ratio above 1 indicates investor profitability. They hold more value than their initial investment. Conversely, a figure below 1 signals a loss-bearing market. According to a recent chart analysis, Bitcoin's MVRV Ratio has climbed, coinciding with the asset's recovery. This uptick surpasses the 180-day moving average (MA), historically a bullish signal.
The chart delineates trajectories where the MVRV Ratio's positive momentum anticipated sizable gains for BTC. The previous four periods with similar momentum shifts saw a minimum of 70% gains each time. The current rise in MVRV momentum suggests a potential new surge. Whether this will mirror past scale or diverge remains speculative.
Presently, Bitcoin is valued at approximately $67,500. This marks an increase of nearly 3% within the last week alone.