Is $77,600 The Next Step For Bitcoin? On-Chain Pricing Model Hints So
May 23 2024 - 12:30PM
NEWSBTC
Data from a Bitcoin pricing model based on an on-chain indicator
suggests that $77,600 may be the level where the asset will see its
next peak. Bitcoin MVRV Pricing Bands Could Provide Hints About
What’s Next In a new post on X, analyst Ali discussed what the
Market Value to Realized Value (MVRV) Pricing Bands model could
suggest about the cryptocurrency’s future. The MVRV ratio is a
popular on-chain indicator that compares the Bitcoin market cap and
realized cap. The former is just the total valuation of the asset
at the current spot price, while the latter is a model that
calculates the asset’s cap by assuming the “true” value of any coin
in circulation is the price at which it was last transferred on the
blockchain. Related Reading: Ethereum Whales Come Alive: Are They
Buying Or Selling? The previous transfer of any coin on the network
was likely the last time it changed hands, and thus, the price at
that time would be its current cost basis. As such, the realized
cap keeps track of the sum of the cost basis of every investor in
the market. Therefore, the MVRV ratio tells us how the value the
investors hold (the market cap) compares against the value they put
in (the realized cap). Based on this indicator, the on-chain
analytics firm Glassnode has developed a pricing bands model. Below
is a chart showing what these pricing bands look like. The pricing
bands in this model represent levels corresponding to a specific
deviation from the mean for the MVRV ratio. From the chart, it’s
visible that the cryptocurrency is currently above the price level,
corresponding to a +0.5 standard deviation (SD) from the mean for
the indicator. More specifically, the price level around $65,100
would be where the MVRV ratio would be +0.5 SD above its mean. The
next major pricing band in this model is +1 SD, which currently
corresponds to around $77,600. In the past, this level has been
where at least local tops have been probable to form for BTC. As is
visible in the graph, the rally top back in March also occurred
when BTC broke this level. “Based on the MVRV Pricing Bands, if
Bitcoin continues to trade above $65,125, the next local BTC top
before a brief correction could be around $77,593!” notes the
analyst. Related Reading: Crypto Analyst Reveals Trigger For 17%
Polygon (MATIC) Rally From the current spot price of the
cryptocurrency, a potential rally to a new all-time high of $77,593
would mean an increase of more than 11% for the asset. It now
remains to be seen how the asset’s price will develop from here and
whether it will be able to maintain above the +0.5 SD MVRV level.
BTC Price Since its sharp surge earlier, Bitcoin’s bullish momentum
appears to have cooled off as the asset has fallen to sideways
movement around the $69,700 mark. Featured image from Kanchanara on
Unsplash.com, Glassnode.com, chart from TradingView.com
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