The data in the chain shows that Bitcoin’s market value to the real value ratio (MVRV) is becoming high, but even outside this extreme territory.
Bitcoin MVRV ratio still to overcome the +1 SD line
In its latest weekly report, the chain analysis company Glass node He has talked about how Bitcoin is currently looking from the perspective of the MVRV relationship. The “MVRV” is a popular indicator that, in summary, tells us how the value in power of investors as a whole is compared to their initial investment.
When the value of this metric is greater than 1, it means that the holders carry more than they put. In other words, they are in a state of net gain. On the other hand, the indicator under the threshold suggests that the general network is under water.
The analysis company has used the MVRV ratio to define price bands that correspond to extreme deviations of the average investor profitability (that is, the average value of the MVRV ratio). These bands help indicate periods in which investor profits/losses are unusually high.
Below is the Glassnode shared box in the report that shows the trend in these price bands for Bitcoin in recent years.
As shown in the graph, the price of Bitcoin has operated above the average level of this model for some time. Recently, the asset has also broken above the standard deviation line +0.5 (SD).
This line corresponds to the price at which the MVRV ratio reaches a value that is 0.5 standard deviations above the average of all time. At present, the level is located around $ 100,200.
The level that BTC has not yet exceeded in this last rally is the +1 SD one, located at $ 119,400. From the table, it is visible that the breakdown of the cryptocurrency on this line has generally led to a top for its price.
The explanation behind this employer lies in the fact that the profits of the largest investors grow, more tempting will become to take them. In extreme deviations of the MVRV ratio, the sales pressure of the holders yielding to this temptation becomes significant, therefore, why the asset is close to a long -term upper part.
In the current cycle, Bitcoin has violated the model +1 level of the model twice, ending with the formations of the Picos of March 2024 and December 2024. For now, the current rally is still below this level, but above the +0.5 SD that also corresponds to a significant level of profits.
“This suggests that the market is relatively heated, but possibly still has room for greater expansion before the profits not made in the hands of investors reach an extreme level above +1σ,” explains the analysis firm.
BTC price
Bitcoin has seen a setback during the last day, since its price has dropped to $ 105,900.
