Bitcoin retained momentum, despite dropping below $70,000
Insights using the MVRV indicator hinted at a possible surge
After several attempts to push beyond $70,000, Bitcoin has once again slipped below this resistance level. This highlighted the potential challenges in sustaining upward momentum on the charts.
At the time of writing, the cryptocurrency was trading at $68,581, following a minor hike of 0.3% over the last 24 hours. What this means is that additional market strength may be required to solidify a long-term move above $70,000.
On the back of the crypto’s recent price movements, CryptoQuant analyst CoinLupin shared insights into Bitcoin’s MVRV (Market Value to Realized Value) cycle. According to the analyst,
“As we approach key November events, the MVRV ratio offers a traditional analytic approach to assess Bitcoin’s value amidst broader market factors.”
The MVRV ratio, with a value of around 2 at press time, showed that Bitcoin’s market value stood at twice its on-chain value estimate. Instead of focusing solely on the MVRV’s current value, CoinLupin emphasized the trend by using tools like the 365-day Bollinger Band for MVRV and the four-year average to better understand Bitcoin’s cycles.
Source; CryptoQuant
At the time of writing, the MVRV ratio had moved above this annual average – A sign that while Bitcoin’s trend continues to head north, there is still potential for a higher cycle peak.
Long-Term price indicators and future targets
According to the analyst, the press time MVRV level suggested a sustained upward trajectory, but one that is yet to reach historical peak levels. This typically falls between 3 and 3.6 on the MVRV scale.
Assuming a stable Realized Value, the analyst estimated that BTC would require a 43-77% hike to potentially hit price targets between $95,000 and $120,000.
He also noted that rising market interest and buying momentum could push the Realized Value higher – A sign that future peaks may exceed these levels based on prior cycles.
Beyond the MVRV, CoinLupin highlighted that Bitcoin has risen considerably over the past year. However, it has only recently approached the MVRV indicator’s average level, maintaining its positive momentum.
Examining key Bitcoin metrics and market interest
Bitcoin’s ongoing performance can be further understood through a closer look at its on-chain metrics. For example – Retail interest, represented by active address data from Glassnode, revealed that this metric has been relatively stable since August.
Source: Glassnode
Despite Bitcoin’s recent price moves, the number of active addresses has remained within a range. It has fluctuated between 870,000 and 546,000 active addresses over recent months.
This steady activity could indicate that while there is interest in BTC, significant new retail engagement may be limited. The lack of strong directional movement in active addresses may imply that while existing users remain engaged, a major influx of new participants has not yet materialized. This could be necessary for BTC to establish a more solid upward trajectory.
Additionally, examining whale transactions—a key indicator of larger holders’ actions—provides another perspective on Bitcoin’s potential.
Data from IntoTheBlock revealed that Bitcoin’s whale transactions recently peaked at 24,070 on 29 October, before declining to 13,300 transactions on 03 November.
Source: IntoTheBlock
Such a drop in large-scale transactions alludes to a temporary reduction in whale activity, one which might impact Bitcoin’s short-term momentum. A fall in whale transactions could signal that larger holders are momentarily pausing their buying or selling activities. This, in turn, may lead to the cooling off of Bitcoin’s price action.
If whale activity climbs again, it could provide renewed support for Bitcoin’s price. This will potentially help the asset go past key resistance levels.
