Indeed, Bitcoin’s price performance has been one of the highlights of the cryptocurrency landscape in recent weeks. However, the leading cryptocurrency has not started the new month well, sparking talk of a history of the currency in August.
Interestingly, one blockchain company has suggested that Bitcoin’s value may not be all doom and gloom, as the market leader could see a price recovery in the next few days.
Bitcoin Price May Be at an All-Time Low – Here’s What Happens Next
Prominent crypto analytics platform Santiment has open A “comfortable rally” could be imminent for Bitcoin. The positive prediction comes after a slow week for the leading digital asset and other large-cap cryptocurrencies.
Santiment’s price recovery prediction is based on the MVRV (market value to real value) ratio during the day, which measures the average profit/loss of Bitcoin holders during a given day. This indicator is specifically used to determine when Bitcoin is undervalued or overvalued.
When the MVRV ratio is above 0%, it means that more traders are making profits. Historically, traders have shown a tendency to sell their assets when it is in the green zone. Meanwhile, an MVRV ratio below 0% indicates that more traders are making losses and that Bitcoin is likely undervalued.
Bitcoin MVRV ratio falls below 0% | Source: Santiment/X
As shown in the chart above, Bitcoin’s current market cap ratio is below zero at -5.5%, indicating that the leading cryptocurrency may currently be undervalued. Low current market cap ratios are typically associated with buying opportunities at a low price.
Moreover, Bitcoin’s price has historically risen whenever its market cap-to-realized value ratio has dropped to current levels. On July 4 and July 25, the leading cryptocurrency’s price jumped by 7% and 9%, respectively, when its market cap-to-realized value ratio dropped to -5%.
In a post on X, Santiment highlighted that other large-cap crypto assets are in a similar position to Bitcoin. These cryptocurrencies, including ETH, ADA, XRP, DOGE, and LINK, have the potential for a price recovery after seeing their MVRV drop during the day.
Bitcoin Price at a Glance
At the time of writing, Bitcoin is trading at around $61,300, reflecting a drop of more than 5% in the past day. Meanwhile, the leading cryptocurrency has fallen by around 10% in the past week, according to data from CoinGecko.
The Bitcoin price falls beneath the $62,000 level on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image by iStock, chart by TradingView
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