In the past week, the Bitcoin market has shown signs of recovery following a significant 15.7% correction that occurred in the latter part of December 2024. This recent price rebound has been accompanied by notable activities among short-term holders (STH), providing crucial insights into Bitcoin’s potential trajectory in the days ahead.
Understanding the Bitcoin STH MVRV Ratio: Current Status and Future Implications
The market value to realized value ratio (MVRV) is an essential tool in the cryptocurrency space, utilized to determine whether an asset is overvalued or undervalued. This metric also helps assess the profitability of holders, with values above 1 indicating profit and values below 1 signifying a loss.
According to data shared by blockchain analytics firm Glassnode, the current Bitcoin STH MVRV ratio stands at 1.1. This indicates that short-term holders—investors who have acquired Bitcoin within the past 155 days—are, on average, enjoying a 10% profit. Given Bitcoin’s recent price declines, there might be an increased likelihood of these holders opting to realize their gains, potentially leading to short-term price resistance.
Historically, the Bitcoin STH MVRV ratio reached peaks of 1.35 in November 2024 and 1.44 in March 2024. These historical peaks suggest that short-term holders could endure higher profitability levels before initiating a significant sell-off. If Bitcoin bulls can sustain the current price recovery and drive demand, the STH MVRV ratio may approach these historical highs, signaling a possible continuation of Bitcoin’s upward market trend.
Critical Price Levels: Why Bitcoin Must Stay Above $87,000
The Bitcoin STH MVRV ratio illustrates that a value of 1.0, representing no profit or loss, serves as a crucial support level during bullish phases or acts as resistance during market downturns. Glassnode’s report highlights that the current STH MVRV ratio aligns this crucial level with the $87,000 price zone.
Data from the Cumulative Bid-Ask Delta reveals a lack of substantial trading activity—an air pocket—between $87,000 and $71,000. This indicates a scarcity of significant buy orders within this price range. Consequently, if Bitcoin’s price falls below $87,000, it could face minimal support until it reaches $71,000, potentially leading to a substantial price decline.
As of the time of writing, Bitcoin is trading at $98,081, marking a 1.02% increase over the past day. With a market capitalization of $1.94 trillion, Bitcoin remains the largest asset in the cryptocurrency market.
