#bitcoin #MVRV ๐ Bitcoin below historical norms: a prerequisite for a breakout or a warning sign?
$BTC is currently trading in the range of $64,000โ$66,000, which is significantly below its average historical estimates. Indicators point to the coin being undervalued, but will we see a final โcleaningโ of the market before a new rally?
We have collected the main theses from the latest CryptoQuant analysis:
๐ What does the MVRV Z-Score indicator say?
The MVRV Z-Score metric (which compares the market and realized value of
$BTC ) is currently at ~0.42 โ significantly below the historical average of 1.7.
June bottom: On June 30, the indicator sank to 0.185 (the lowest figure of this cycle).
No surrender: Despite the price weakness, the indicator has not yet fallen below zero. For example, at the bottom of the 2022 bear market (when BTC was worth $16,000โ$17,000), the Z-Score sat in the negative zone for several weeks. This means that we have not yet seen panic selling at the level of previous cycles.
๐ธ Losses turned into profits
In June and mid-July, investors recorded gigantic realized losses (about $8.5 billion in June and $3 billion in July).
However, over the past week, the trend has reversed: the PnL indicator has become positive again - investors recorded profits at the level of $239 millionโ$500 million.
The pressure from sellers is noticeably decreasing, but analysts warn: this relief does not yet guarantee that the cyclical bottom has finally formed.
๐ Two scenarios for the development of events:
๐ Optimistic: A return of the Z-Score to the average mark of 1.7 will confirm the restoration of a healthy asset valuation. Some analysts suggest that there may not be a "classic" panic surrender this time, and the market has already undergone its restart.
๐ Negative: A break through the June low (0.185) and entry into the negative zone will signal the risk of further decline in the BTC price before the final reversal.