Indeed, bitcoin’s price performance has been one of the biggest highlights in the cryptocurrency landscape over the past few weeks. However, the leading cryptocurrency hasn’t exactly had a dream start to the month, sparking talk of the coin’s history in August.
Interestingly, one blockchain firm has indicated that it might not be all doom and gloom for the value of bitcoin as the market leader could see a price rally in the coming days.
bitcoin price may have bottomed out – here's what's next
The prominent cryptocurrency analysis platform Santiment has x.com/santimentfeed/status/1819502487222526287″ target=”_blank” rel=”noopener nofollow”>revealed that a “relief rally” could be around the corner for btc price. This positive projection comes after what has been a slow week for the flagship digital asset and other large-cap cryptocurrencies.
Santiment’s prediction of a price rally is based on the intraday MVRV (market value to realized value) ratio, which measures the average profit/loss of bitcoin holders within a specific day. This indicator is particularly used to identify when btc is undervalued or overvalued.
When the MVRV ratio is above 0%, it implies that more traders are making profits. Historically, traders have shown a tendency to sell their assets when they are in the green. Meanwhile, an MVRV ratio below 0% indicates that more traders are making losses and that bitcoin is likely undervalued.
<img decoding="async" class="aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/08/Bitcoin-Price-Drops-to-61000-Whats-Next-for-BTC.jpeg" alt="bitcoin Price” width=”1200″ height=”765″/>
bitcoin MVRV ratio falls below 0% | Source: x.com/santimentfeed/status/1819502487222526287" target="_blank" rel="noopener nofollow">Santiment/x
As shown in the chart above, bitcoin’s MVRV ratio is currently below zero at -5.5%, indicating that the leading cryptocurrency could be undervalued at present. Typically, low MVRV ratios have been associated with an opportunity to buy at the bottom of the price.
Furthermore, historically, bitcoin's price has risen whenever the ratio of market cap to realized value has fallen to current levels. On July 4 and July 25, the price of the leading cryptocurrency rose by 7% and 9%, respectively, when the MVRV ratio fell to -5%.
In the post about 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 rally following the drop in the intraday MVRV ratio.
bitcoin price at a glance
At the time of writing, bitcoin’s price is hovering around $61,300, reflecting a drop of over 5% over the past day. Meanwhile, the flagship cryptocurrency has lost value by nearly 10% over the past week, according to data from CoinGecko.
x/wqobaHme/” alt=”bitcoin Price” width=”1832″ height=”1314″/>
The bitcoin price falls beneath the $62,000 level on the daily timeframe | Source: BTCUSDT chart on x/wqobaHme/" target="_blank" rel="noopener nofollow">TradingView
Featured image from iStock, chart from TradingView
