Bitcoin MVRV Hits Critical Threshold For Profit Taking – What Does This Mean?
The post Bitcoin MVRV Hits Critical Threshold For Profit Taking – What Does This Mean? appeared on BitcoinEthereumNews.com.
Bitcoin recorded another remarkable price performance in the past week, gaining by 19.16% according to data from CoinMarketCap. The crypto market leader established a new all-time high at $93,434 on Wednesday, as odds of achieving a six-figure market price by year’s end are now higher than before. Amidst the current market euphoria, CryptoQuant analyst Amr Taha has shared some market insights that may indicate an impending price fall. Bitcoin Enters Profit-Taking Zone – Sell Or HODL? In a Quicktake post on Friday, Amr Taha stated many investors may be preparing for a cash-out as the Bitcoin MVRV ratio reached 2.64. Generally, the Market Value to Realized Value is a trading indicator used to measure whether an asset is overvalued or undervalued or to identify market tops or bottoms. Amr Taha explains that a Bitcoin MVRV ratio above 2 indicates that investors currently hold significant amounts of unrealized gains and are likely to commence profit-taking. However, historical data from late 2021 and early 2022, shows that profit-taking occurs as the Bitcoin MVRV ratio moves into a range of 2.5-3.5, and is accompanied by significant corrections. Following the Bitcoin price surge over the past few weeks, an MVRV ratio of 2.64 presents substantial potential for a major price correction, despite the minor price drops in the past few days. This sentiment is further backed by the asset’s relative strength index (RSI), which remains in the overbought zone. However, Ama Taha further explains that Bitcoin may sometimes only form a major market top when the MVRV ratio reaches as high as 4. Therefore, at 2.64, the premier cryptocurrency may still sustain its current upward price trajectory, if bullish market momentum persists. The analyst advises that investors monitor the MVRV ratio as a rise towards 3 would signal the potential for further price…
Filed under: News - @ November 17, 2024 3:06 am