One analyst explained that the next target for bitcoin could be $78,700 if btc could cross this resistance level from an on-chain price pattern.
bitcoin MVRV Extreme Deviation Price Bands Place Resistance at $65,800
In a new x.com/ali_charts/status/1808092251760849400″ target=”_blank”>mail On x, analyst Ali has analyzed some bitcoin price levels that could be important based on an on-chain pricing model. The model is based on the ratio of market cap to realized value (MVRV).
The MVRV ratio is a popular indicator that, simply put, tracks the relationship between the value of bitcoin investors currently hold (the market cap) and what they initially used to purchase their coins (the realized cap). This metric tells us about the profit/loss situation of the market as a whole.
Now, a pricing model called MVRV Extreme Deviation Price Bands uses standard deviations from the historical mean of the MVRV index to determine significant price levels for the cryptocurrency.
Below is the chart shared by the analyst showing what the relevant levels for this model have looked like recently.
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The yellow line in the center of the chart represents the price level at which the MVRV ratio would equal its historical average. Currently, this level is around $52,900.
The level above this line, colored in orange, corresponds to a standard deviation (SD) of +0.5 above the indicator's mean. Currently, the spot price of the cryptocurrency is below this mark, which implies that the deviation of the MVRV ratio is less than +0.5 SD.
Ali notes that this level, corresponding to +0.5 SD, at around $65,800, is “one of the most crucial resistance zones” for bitcoin. The chart shows that bitcoin struggled to break above this level during retests in December 2023 and January 2024.
The analyst says that if btc can break above this resistance, the $78,700 mark, corresponding to +1 SD of the mean MVRV ratio, could be the next significant target.
Historically, asset highs have become more likely to form when the MVRV ratio has deviated above this line. The all-time high (ATH) price at the beginning of the year, which remains the peak of the rally, also occurred shortly after the asset rose above this level.
From bitcoin’s current spot price, a surge towards this potential target of $78,700 would suggest an upside of over 27% for the cryptocurrency. Before the asset can dream of retesting this level, it would need to overcome the resistance at $65,800.
btc Price
bitcoin broke above the $63,800 level yesterday but suffered a pullback over the past 24 hours as its price has now dropped to $61,800.
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