Is Bitcoin Bull Run Over? What This Legendary Metric Says
Here’s how historical trends in the Bitcoin Market Value to Realized Value (MVRV) ratio indicate whether the current bull market is over.
Bitcoin MVRV Ratio May Hint Where BTC Is in the Current Cycle
in a new postal On X, CryptoQuant founder and CEO Ki Young Ju shared a chart showing the past pattern of Bitcoin’s MVRV ratio. this MVRV ratio Refers to a popular on-chain metric that, simply put, tracks the value of BTC investors’ holdings (i.e. market cap) compared to the value they originally invested in the asset (i.e. market cap). achieve upper limit).
When the value of this ratio is greater than 1, it can be considered that investors as a whole are in a profitable state. On the other hand, it is located below this mark, suggesting losses are dominant in the market.
The version of the MVRV ratio released by Young Ju is not a regular version, but a modified form called “True MVRV”. This change only takes into account data from tokens that have participated in some kind of trading activity over the past seven years.
Coins older than seven years can be considered lost forever, either due to forgetfulness or misplaced wallet keys. As a result, True MVRV excludes these tokens that may never return to circulation and can describe the industry more accurately than the standard version of the metric.
Now, the chart below shows how this Bitcoin indicator has trended throughout the cryptocurrency’s history:
As shown in the chart above, Bitcoin True MVRV has climbed to relatively high levels during this bull run. This means the average investor is making handsome profits.
Historically, the higher the return to holders, the more likely they are to participate massive sell-off With a profit-taking motive. Therefore, whenever the MVRV ratio rises, BTC is likely to top.
As you can see from the chart, tops in past cycles have occurred when the indicator crossed a specific line. So far, the indicator has not come close to retesting this level in the latest period.
The founder of CryptoQuant said that the reason why the market capitalization has not overheated relative to the realized market capitalization is that there is still $7 billion in capital flowing into the Bitcoin market every week.
If the current cycle will show similar conditions to previous cycles, then the true MVRV is higher, but not extremely high, possibly indicating that BTC still has room in the current bull market.
bitcoin price
Bitcoin has given up its Christmas gains, with its value now back to $95,700.
