As Bitcoin (BTC) remains range-bound in the mid $60,000 price level, bulls are trying to push the cryptocurrency toward $70,000 to initiate bullish momentum for the premier cryptocurrency. While several analysts have gone on record saying that BTC has likely already created its bottom for the current market cycle, one indicator suggests that that might not be the case just yet.
Bitcoin MVRV hovering above accumulation level
According to data received on Friday, Bitcoin’s market value to realized value (MVRV) ratio is still trading above the accumulation zone. Although it has declined significantly from the cycle highs, it is still meaningfully above the accumulation zone of <=1.
For the uninitiated, the MVRV ratio compares Bitcoin’s current market capitalization to its realized capitalization, helping determine whether the asset is overvalued or undervalued relative to the average cost basis of all coins.
A high MVRV ratio suggests investors are sitting on large unrealized profits – signaling potential market tops – while a low MVRV ratio indicates reduced profitability and has historically coincided with attractive long-term buying opportunities.
When this metric is less than or equal to 1, it shows that Bitcoin’s market value has fallen to or below its realized value, meaning the average holder is at breakeven or in an unrealized loss. Historically, this zone has marked periods of deep undervaluation and has provided strong long-term accumulation opportunities before major bull markets.
One silver lining, according to the following chart, is that the MVRV is still far from the so-called distribution or high-risk zone, meaning that the BTC market is no longer overheated, and likely on the lower side of things on momentum indicators like the relative strength index.
However, the fact that it has not revisited the accumulation zone also means that this cannot yet be confirmed as a complete cycle bottom. The observation aligns with a previous CryptoQuant statement that said that BTC is yet to show signs of hitting a market bottom.
Others are convinced BTC has bottomed
While the MVRV ratio suggests the bottom is yet to come, entities like Standard Chartered are convinced that the bottom has already been hit. Still others are certain that the bottom is nearby.
On July 16, BTC revisited a rare on-chain signal that was last observed near major cycle bottoms. Earlier in the month, it flashed another signal that was seen at 2022 bottom.
