The dynamic world of cryptocurrency has once again captured the attention of analysts and investors as Bitcoin’s price action aligns with the impending US election in November. A notable CryptoQuant analyst, CoinLupin, has provided an in-depth analysis using the CryptoQuant QuickTake platform. The focus of this analysis is on Bitcoin’s Market Value to Realized Value (MVRV) ratio, a crucial metric for assessing Bitcoin’s valuation against its on-chain fundamentals.
In a market fraught with macroeconomic uncertainties, CoinLupin sheds light on the importance of the MVRV ratio in evaluating Bitcoin’s current market stance. This insight is particularly valuable for investors looking to navigate the volatile crypto landscape.
MVRV Ratio and Historical Cycle Peaks
The MVRV ratio, which presently hovers around 2, indicates that Bitcoin’s market value is roughly double its realized on-chain value. This metric essentially reflects the average price paid by all Bitcoin asset holders. CoinLupin emphasizes that the true value of the MVRV ratio lies in observing its trend changes over time rather than focusing solely on its absolute value.
By employing the 365-day Bollinger Band for MVRV alongside the 4-year average—a common indicator of Bitcoin’s cyclical trends—CoinLupin noted that the MVRV ratio is exceeding the long-term average and has recently surpassed its 365-day moving average. This observation suggests that Bitcoin’s upward trajectory is still firmly in place. CoinLupin further elaborated on the implications of Bitcoin’s MVRV levels, particularly in relation to historical cycle peaks.
Historically, Bitcoin has reached its peak when the MVRV ratio is between 3 and 3.6. Although Bitcoin’s current MVRV of 2 does not yet reach this peak range, the upward trend in the MVRV ratio indicates potential for further market growth, assuming historical trends hold. With the Realized Value (RV) remaining constant, CoinLupin’s analysis suggests that Bitcoin would require a price rise of approximately 43% to 77% to achieve an MVRV level between 3 and 3.6. This projection translates to a potential price target range of $95,000 to $120,000, assuming favorable market conditions. However, CoinLupin also noted that the Realized Value might increase as new buying interest arises, potentially pushing peak valuations beyond these estimated levels.
Current Bitcoin Market Performance
After weeks of building momentum to surpass the $70,000 resistance mark, Bitcoin has once again dipped below this threshold, suggesting that the market might not yet possess the necessary momentum to push further upward. Over the past week, the asset has experienced a nearly 1% decline.
Currently, Bitcoin is trading at $68,306, marking a slight 1% increase in price, with its 24-hour high recorded at $69,317. Despite this minor dip in recent weeks, Bitcoin’s daily trading volume has shown an upward trend during this period.
Data from CoinGecko reveals that Bitcoin’s 24-hour trading volume has risen from under $30 billion last Monday to over $38 billion today. This surge in trading volume indicates growing interest and activity in the Bitcoin market, despite the slight fluctuations in price.
