MVRV Indicator Signals Potential Bitcoin Bottom as Long-Term Holders Reconsider Accumulation Translation: MVRV Indicator Signals Potential Bitcoin Bottom as Long-Term Holders Reconsider Accumulation

The MVRV ratio of the leading cryptocurrency has fallen beneath the 365-day simple moving average (SMA), indicating a local minimum. This has been highlighted by CryptoQuant contributors from ShayanMarkets.

At the time of writing, the indicator stands at approximately 1.9.

«Historically, each time the ratio dips below the 365-SMA, it has signified a potential buying opportunity and a bottom signal. This was observed in mid-2021, June 2022, and early 2024,» experts noted.

They believe that a sustained trend suggests Bitcoin is entering a phase of undervaluation, where long-term holders typically begin to accumulate the asset.

The MVRV has decreased following a drop in the digital gold’s value to $103,000, «reflecting a reduction in speculative excess and an increase in long-term confidence,» ShayanMarkets stated.

«If the metric starts to rise from the current levels, it will confirm that the recent sell-off was a cyclical bottom formation, signaling a potential resumption of the bullish phase in the fourth quarter,» the researchers summarized.

Analyst Michaël van de Poppe pointed out that gold has seen a significant decline, dropping more than 8% in a single day. Initially, Bitcoin moved in opposition to the precious metal, but eventually also experienced a downturn.

«I don’t think this will last long. Gold’s volatility is very high and is linked to the sharp price increases we’ve seen in recent months. I believe that gold has now peaked, meaning funds should be redirected to other assets,» he added.

According to the analyst, a weak consumer price index should serve as a catalyst for potential rate cuts and the end of the US government shutdown. Following this, Bitcoin is expected to rise as «risk appetite regains momentum.»

Simultaneously, Bitwise suggested that a potential 5% capital rotation from gold into Bitcoin could drive the price of the leading cryptocurrency up to $240,000.

It is worth noting that Bitwise’s investment director, Matt Hougan, has explained the lag of digital currency behind the precious metal.