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The Bitcoin (BTC) MVRV ratio has dropped below its 90-day average, signaling an upcoming price rally, with the possibility of an impressive 67% increase.
Market Veteran Ali Martinez called attention to this bullish turn of events in a recent post on X. Notably, market data from Glassnode confirms that the 90-day average of the Bitcoin MVRV ratio has continued to increase.
Interestingly, while the 90-day average has seen a steady uptick, the actual MVRV ratio has recorded occasional declines and upswings, as it mirrors Bitcoin’s market performance in real-time. The MVRV (market value to realized value) ratio compares Bitcoin’s market value to its realized value.
For context, Bitcoin’s market value represents its current price on exchanges, while realized value reflects the aggregate cost basis of Bitcoin holders, based on the price at which BTC tokens were last transacted on-chain.
If the MVRV ratio gradually drops, it signals bearish sentiment, indicating that the market value of Bitcoin is falling relative to its realized value. The metric has been dropping since BTC collapsed from the $73K ATH on March 13, data from Glassnode shows.
BTC MVRV Ratio Falls Below 90-Day Average
However, amid this drop, the ratio has now fallen below the 90-day average, an occurrence which Ali has identified as a bullish signal. Citing market data, Ali revealed that this occurrence has played out four times since January 2023, and each time, it preceded a market upswing, with an average surge rate of 67%.
Every time the #Bitcoin MVRV Ratio falls below its 90-day average since November 2022, it signals a prime #BTC buying opportunity with an average gain of 67%!
This opportunity is upon us again, indicating it might be the perfect time to buy $BTC. pic.twitter.com/nPMjF2GTpr
— Ali (@ali_charts) April 21, 2024
The market analyst believes this upswing would materialize again this time around, especially considering the latest Bitcoin halving. The 67% average uptrend rate would put Bitcoin’s price at $110,409, representing a new all-time high. However, it remains to be seen if the premier crypto can attain this feat.
Bitcoin Support and Resistance Levels
With Bitcoin struggling to solidify its position above $66,000, Ali emphasized in a subsequent analyst that it is looking to establish a robust support at this price level. As Bitcoin currently trades for $66,176, the analyst stressed that it could leverage the $66,048 price as support.
#Bitcoin aims to secure $66,000 as support, where 1.54 million addresses bought 747,000 $BTC. If successful, the next critical resistance level for #BTC is between $69,900 and $71,200! pic.twitter.com/TvFCLNgHCi
— Ali (@ali_charts) April 22, 2024
Notably, this price point represents a demand wall at which 1.54 million addresses amassed 747,000 tokens. According to Ali, if Bitcoin successfully establishes a support at this price level, it will set its eyes at conquering the sell wall between $69,900 and $71,200, where over 1 million addresses hold 444,410 BTC.
However, despite the recent upsurge, the bulls need to hold firm against any drops to the April 19 lows below $60,000. IntoTheBlock revealed today that BTC boasts an important demand wall at the $64,800 mark, with over 1.66 million addresses stationed at the crucial demand zone.
Bitcoin is currently positioned right on top of a key demand zone, with 1.66 million addresses having purchased it at an average price of $64,800.
This price point could potentially act as a strong support level should the market experience further downward pressure. pic.twitter.com/MaCABIULNG
— IntoTheBlock (@intotheblock) April 22, 2024
Amid the latest rebound, Bitcoin has now soared above the 50-day EMA at $64,640, as short-term momentum flips bullish. The Binary CDD and the Exchange Reserve metrics further confirm the bullish sentiments, with the Binary CDD indicating low long-term holders’ movement and the Exchange Reserve confirming that investors have continued to take their BTC tokens off exchanges.