- Bitcoin’s MVRV ratio signals cooling, hinting at reduced market overheating but no clear bottom yet.
- A bearish MVRV dead cross suggests weakening momentum, raising downside risks if key support levels break.
- Bitcoin is consolidating near $81K support, a critical juncture that may trigger a rebound or deeper correction.
As indicated by the CryptoQuant metrics, the market value to realized value (MVRV) ratio concerning Bitcoin is off to “cooling”. The on-chain metrics compare the market capitalization of Bitcoin with that of its realized value. When the MVRV ratio rises, it tends to reflect a heated market. Conversely, a low MVRV shows undervaluation.
In early March, the 30-day moving average (30DMA) of the MVRV ratio crossed below the 365-day moving average (365DMA). This bearish dead cross hinted at weakening momentum and growing downside risk. Historically, similar crosses have led to price declines, reinforcing the MVRV ratio’s effectiveness as a market sentiment gauge.
Currently, the MVRV ratio is converging toward its 4000-day moving average, which represents long-term valuation trends. This shift suggests Bitcoin is exiting its overheated zone. However, no definitive bottom signal has emerged yet.
Bitcoin Tests Critical Support Levels
As per CryptoGoos data, Bitcoin is currently testing a support level. The latest price stands at $81,856, reflecting a decline of 0.84%. The opening price of $82,552, the peak price of $82,608, and the lowest price of $81,481 are all within the weekly trading range.
In the long run, Bitcoin prices were trading at levels beginning at $50,000 as they steadied their upward trend from late 2023 into early 2024. Price consolidation occurred between $56,000 and $68,000 during early 2024 before a major breakout in September.
However, Strong selling pressure arose at the $106,000 “Supply Zone” that caused a pullback. Bitcoin corrected sharply towards the “Demand Zone” around $90,000, where consolidation was brief. Thereafter, further declines strengthened the downwardness towards key support levels of $81,360 and $73,457.
Currently, Bitcoin is hovering around the support of 81,000 dollars which could possibly form a bottom pattern. Retailers are anxious at this point because they want to know whether there will be any additional downside risks. If this support can hold, there will be a rebound. Otherwise, further declines may follow.
