Bitcoin Could End Up Plummeting To $80,100 If This Support Fails
On-chain data suggests that Bitcoin is currently retesting important support levels. This is where the next important line is, if that level fails.
Bitcoin is currently trading MVRV for about 1 year
In its latest weekly report, Chain Analytics Glass node A Bitcoin pricing model based on market value of the Realization Value (MVRV) Z score has been discussed.
The MVRV z-score is an indicator that basically compares the market cap of BTC to the realized ceiling. The difference between metrics and popularity MVRV comparison Because it also uses standard deviation tests to remove extremes from the data.
More formally, the metrics are calculated as
The ratio between the market value difference and the standard deviation of the realized upper limit and the market value, i.e. (market value – realized upper limit) / STD (market value) (market value)
this”The upper limit of implementation“Here is referring to Bitcoin’s capitalization model, which calculates the total valuation of assets by assuming that the “real” value of all tokens in circulation is equal to the last price on the blockchain.
The final transaction of any token can be assumed as the final price of the change of hands, so its then-price can be considered as the current cost basis. Therefore, the implemented upper limit is the sum of the cost basis of all coins on the network.
In this case, the MVRV Z score essentially tells us that the value of investors (i.e., market cap) is compared with the capital they initially invested (the realized cap).
Now, here is a graph of the Bitcoin pricing band model based on this metric shared by the analytics firm in the report:
As shown in the figure above, the model consists of three lines related to the standard deviation (SD) of the 1-year MVRV Z score. The rows are the average of the metrics, +1 SD and -1 SD.
Currently, the model’s intermediate pricing belt is located at about $96,300. This is the same as BTC in recent support Market downturn.
As the report explains,
Price is currently strongly supported at the near-level average. If the price is lowered, -1σ could mark a key threshold for the Bulls’ next major defensive support line. Instead, as investors gain meaningful unrealized paper profits, the +1σ level may act as a resistance and may attempt to realize their market strength.
-1 SD support level is currently $80,100, while the +1 SD resistance line is $118,000. It remains to be seen that these average retests will lead to Bitcoin.
BTC price
At the time of writing, Bitcoin trading was around $97,400, down more than 2% from last week.
