Data from a bitcoin price 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 Price Bands Could Provide Clues to What's Next
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The MVRV index is a popular on-chain indicator that compares bitcoin market capitalization and realized capitalization. The first is just the total valuation of the asset at the current spot price, while the second is a model that calculates the asset cap assuming that the “true” value of any currency in circulation is the price at which it was last transferred in the market. block chain.
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The previous transfer of any currency on the network was probably the last time it changed hands and therefore the price at that time would be its current cost basis. As such, the realized limit tracks the sum of each investor's cost base in the market.
Therefore, the MVRV index tells us how the value investors hold (market capitalization) compares to the value they put in (realized capitalization).
Based on this indicator, the on-chain analysis company Glassnode has developed a price band model. Below is a chart showing what these price bands look like.
The price bands in this model represent levels corresponding to a specific deviation from the mean of the MVRV index. From the chart, it can be seen that the cryptocurrency is currently above the price level, which corresponds to a standard deviation (SD) of +0.5 from the mean of 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 price band on this model is +1 SD, which currently corresponds to around $77,600.
In the past, this level has been where at least local highs were likely to form for btc. As can be seen from the chart, the top of the rally in March also occurred when btc broke this level.
“Based on MVRV price bands, if bitcoin continues to trade above $65,125, btc’s next local high before a brief correction could be around $77,593.” points out the analyst.
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From the cryptocurrency's current spot price, a possible rally to a new all-time high of $77,593 would mean an increase of over 11% for the asset. It now remains to be seen how the asset's price will develop from here and whether it can stay above the +0.5 SD MVRV level.
btc Price
Since its previous sharp rise, bitcoin's bullish momentum appears to have cooled as the asset has fallen into a sideways move around the $69,700 mark.
Featured image by Kanchanara on Unsplash.com, Glassnode.com, TradingView.com chart
