Bitcoin’s price action has sparked renewed interest among analysts and investors as the cryptocurrency approaches a major event (the US elections) later in November.
A CryptoQuant analyst known as CoinLupin recently submitted a report analysis On the CryptoQuant QuickTake platform, focusing on Bitcoin’s market capitalization to realized value ratio (MVRV), a metric often used to measure Bitcoin’s value compared to its on-chain fundamentals.
As macroeconomic factors create uncertainty in cryptocurrency markets, CoinLupin shared insights into the importance of MVRV for assessing Bitcoin’s current market position.
MVRV and historical cycle peaks
The MVRV ratio, currently around 2, indicates that Bitcoin’s market cap is approximately twice its value realized on-chain, reflecting the average price paid by all holders of the asset.
CoinLupin explained that the key is to monitor trend changes within the MVRV ratio over time rather than focusing on this absolute value.
Using the 365-day Bollinger band for MVRV along with the 4-year average — a common reflection of cyclical trends for Bitcoin — the analyst noted that the MVRV ratio is currently above its long-term average and recently surpassed its 365-day moving average.
According to CoinLupin, this indicates that Bitcoin’s upward trend remains intact. CoinLupin explained the potential importance of MVRV levels for Bitcoin, especially in relation to historical cycle peaks.
In previous cycles, Bitcoin usually peaks when the MVRV ratio is between 3 and 3.6. While Bitcoin’s current MVRV of 2 is not yet close to this peak range, the upward trend in MVRV indicates that the market may still have room to grow if historical patterns continue.
If the realized value (RV) remains constant, CoinLupin analysis predicts that Bitcoin will need a price increase of about 43% to 77% to reach an MVRV level between 3 and 3.6.
This translates to a potential target price range of $95,000 to $120,000, provided market conditions support upward momentum. However, the analyst also noted that realized value could increase as new buying interest emerges, which could push peak valuations beyond these estimated levels.
Bitcoin market performance
After several weeks and days of building momentum to rise beyond the $70,000 resistance level, Bitcoin has once again fallen below this price mark, suggesting that there may not be enough momentum yet to move further to the upside.
So far, the asset has fallen approximately 1% in the past week. However, BTC is currently trading at $68,306, registering a slight 1% price increase as its 24-hour high remained at $69,317.
Interestingly, despite the slight price decline in the past weeks, Bitcoin’s daily trading volume has recorded an increase during this period.
especially, Data CoinGecko shows that BTC’s 24-hour trading volume has risen from under $30 billion last Monday to currently over $38 billion as of today.
Featured image created with DALL-E, chart from TradingView
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