• The Bitcoin Market Value to Realized Value (MVRV) ratio finally broke above 1 after 216 days, suggesting another BTC rally is in the works.
• BTC prices surged to as high as $23,300 on Saturday, January 21, indicating that demand is still strong.
• Analysts may use the MVRV ratio to time market entries and exits, as typically prices are at their bottom when the MVRV is below 1.
The Bitcoin Market Value to Realized Value (MVRV) ratio is a key indicator used to measure Bitcoin’s price movements. After 216 days of remaining below 1, the MVRV ratio finally broke above 1, suggesting that another BTC rally is in the works. This accumulation is the second longest ever since it took BTC prices 300 days to bottom up after the bear run of 2014-2015.
On Saturday, January 21, BTC prices surged to as high as $23,300, indicating that demand is still strong. This positive development is especially beneficial for optimistic holders, as it confirms that the retracement puts BTC within a bullish formation following impressive gains on January 20. As of writing on January 22, prices have cooled off, and the coin is trending at around $22,700, albeit with relatively low trading volumes.
Analysts may use the MVRV ratio to time market entries and exits. Typically, whenever the MVRV ratio is below 1, then it implies that prices are at their bottom. Any reversal from sub-1 to above 1 with increasing valuation may signal price bottoms and, possibly, more room for upsides in the coming days. This signal could be a huge boost to the crypto markets, injecting the much-needed volatility and ensuring BTC prices remain strong.
Overall, the MVRV ratio breaking above 1 is a positive sign for the crypto markets and could be an indicator that prices are about to surge once again. It’s important to note, however, that the MVRV ratio is only one of many indicators and should be used in conjunction with other analysis and research before making any serious investments.