Bitcoin’s recent price surge is accompanied by high MVRV ratios, signaling a heated market.
- Bitcoin is currently trading at around $87,000. The MVRV is at its highest in over a year.
Bitcoin [BTC] has been at the center of investor attention, driven by its recent all-time highs and significant shifts in its on-chain metrics.
Among these indicators, the Market Value to Realized Value (MVRV) ratio provides insights into potential market behavior. At the same time, the Global In/Out of the Money (GIOM) data offers a view of holder profitability.
Together, these metrics reveal an interesting picture of Bitcoin’s current state.
Bitcoin MVRV ratios indicate a heated market
The 30-day MVRV ratio for Bitcoin was at 15.01% at press time, while the 365-day ratio stood at 37.99%. These levels indicate that Bitcoin holders, on average, have accumulated significant unrealized profits.
Historically, such elevated MVRV ratios have correlated with periods of heightened market activity, often leading to either profit-taking or continued bullish momentum.
Source: Santiment
The 365-day MVRV’s high level suggests that long-term holders are seeing substantial gains, a positive sign for market sentiment, and a potential trigger for increased selling pressure.
Majority of Bitcoin addresses are profitable
According to data from IntoTheBlock, 53.61 million Bitcoin addresses, representing 99.35% of all addresses, are currently in profit. Around the current price, 69.58% are in the money, while 0.11% are at the money, and 30.30% are out of the money.
This breakdown highlights strong support levels, as the high percentage of “in the money” addresses suggests a strong support base for Bitcoin.
Profitable holders are less likely to sell at lower prices, while the 30.30% out-of-the-money addresses could create resistance as Bitcoin approaches levels where these holders break even, particularly near historical price zones.
The data further underpins Bitcoin’s bullish outlook, as most holders are in favorable positions, which could reinforce market confidence.
BTC price action reflects growing volatility
Bitcoin’s price recently touched $88,666 before retracing to $87,435 at the time of writing. This price action underscores the asset’s growing volatility as it continues to climb higher following the bullish breakout from its consolidation phase around $68,000.
Source: TradingView
The daily chart highlights a strong upward trend supported by the 50-day and 200-day moving averages, currently at $68,321 and $64,148, respectively.
The recent rally has pushed Bitcoin into overbought territory, as evidenced by the Relative Strength Index (RSI) at 84.88. This suggests a potential cooldown phase before any further upward movement, especially if profit-taking intensifies.
Key support levels to watch include $85,000 and $80,000, while resistance is anticipated near $90,000 and $95,000 as Bitcoin inches closer to the psychological $100,000 mark.
Market outlook: Caution or continuation?
The combination of high MVRV ratios and overwhelmingly profitable addresses paints a bullish picture for Bitcoin.
Read Bitcoin (BTC) Price Prediction 2023-24
While some resistance may emerge from out-of-the-money addresses seeking to exit at breakeven, the underlying market sentiment remains optimistic.
Investors will likely monitor these metrics closely as Bitcoin navigates uncharted territory, with its next major milestone potentially crossing the $90,000 barrier.
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