The MVRV (Market-Value-to-Realized-Value) indicator is an important thermometer that compares the current market value of Bitcoin (BTC) to the average price at which the coin was purchased, revealing whether the market is overheated (overvalued) or oversold (undervalued).
recently, MVRV has fallen to levels not touched since April last year.is approaching the range identified as this bull market’s “profit floor” (highlighted by a yellow box on the chart), analysis by CryptoQuant shows.
Since the beginning of 2024, the MVRV ratio has received particularly strong support in the 1.7-1.8 range. Whenever the market retreats to this level, the selling pressure is significantly reduced.
CryptoQuant interprets this range as the final “buy on the bullshit” zone of the current cycle. MVRV withdrawal to this “profit floor” This corresponds to Bitcoin prices ranging from $91,800 to $97,200.. At the moment, the digital asset is trading at $101,600 today.
Divergence and volatility patterns to watch in Bitcoin
Despite reaching key support, the market is showing signs of weakening momentum through a bearish MVRV divergence (indicated by the red dotted line in the chart above). The company details that this discrepancy indicates that while the price of digital assets is rising, the market’s total unrealized gains, or “speculative fever,” is decreasing.
While this is a classic sign of weakening momentum, the analytics firm notes: “That doesn’t automatically mean a bear market is coming,” he stressed.states that there was a similar divergence in 2017, prior to the final parabolic growth.
Beyond MVRV, Bitcoin price movement is forming an “expanding wedge” chart pattern. Although this pattern technically keeps the digital asset in an upward trend, it exhibits extreme volatility in the short term. This is usually considered a ceiling pattern. This type of volatile “expansion” is unsustainable and often means that one side, usually the buyer,This may cause you to run out of water and fall.
Despite volatile technical patterns, market volumes indicate that new buyers continue to steadily absorb supply. According to CryptoQuant, this absorption could be further strengthened as the CLARITY Act could be passed by the end of the year.
As previously reported by CriptoNoticias, the bill aims to establish regulatory clarity for digital assets in the US, specifying which are products and which are securities, and defining administrative roles between the SEC and CFTC, potentially drawing a new wave of participants to the market.
