What the most recent trend of the Bitcoin Market Price to Actual Value (MVRV ratio) tells us about the state of the market today.
Bitcoin MVRV Ratio Drops To 2.34 Level
Market intelligence data shows that the number of people using market intelligence platforms has increased. IntoTheBlockThe BTC/MVRV Ratio soared to new heights earlier in the year, as the crypto rally began.
The “MVRV ratioThe ” indicator is popular and tracks the relationship between Bitcoin’s market capitalization and its realized cap. The first is the value of all assets at their current price. While the second is a model for on-chain capitalization.
The real cap represents the entire value of cryptocurrency supply. This is based on a simple assumption that every coin has its value at the time of last transfer to the blockchain, not at current market value.
The realized cap can be interpreted as the sum of the capital invested by investors in an asset. It is calculated after taking into consideration the price paid for each token that was in circulation.
The MVRV tells us the difference between the current value of Bitcoin (the market cap), and the amount they invested (the realized capital).
This chart shows the Bitcoin MVRV rate over the course of the last couple years.
The value of this metric seems to have been declining in recent times | Source: IntoTheBlock on X
The Bitcoin MVRV has been above 1 as can be seen in the chart for some time. The indicator will show a value greater than 1 when the market cap exceeds the realized cap. This means that the investor has net profit.
Then, you can use the latest rally In the asset this indicator has soared to high levels. It is the natural result of holders profits exploding with the price increase.
The MVRV Ratio has also changed direction, now moving down. Presently, this ratio’s value is around 2,34.
“Traditionally, an MVRV ratio above 3 has been a reliable marker for predicting price peaks,” Notes from IntoTheBlock. This metric is not yet above this level in the current rally. The metric was close to this level recently but has now gained some distance.
Why has it always been the case that tops have occurred when Bitcoin MVRV is high? Why do tops always occur at high values of the Bitcoin MVRV ratio?
The MVRV value is a good indicator of extreme profits.
BTC Price
Bitcoin’s price is currently around $67200. This represents a 3% increase over the previous 24 hours.
Source:| Source: BTCUSD on TradingView
Featured image from Yiğit Ali Atasoy on Unsplash.com, IntoTheBlock.com, chart from TradingView.com
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