Data on the chain shows that Bitcoin’s market value (MVRV) ratio is getting higher and higher, but still exceeds this extreme area.
Bitcoin MVRV ratio has not exceeded +1 SD line
In its latest weekly report, the chain analysis company GlassNode talks about what Bitcoin currently looks like from the perspective of MVRV ratios. The “MVRV ratio” is a popular indicator, and in short, it tells us that investors generally hold value compared to their initial investment.
When the value of the indicator is greater than 1, this means that the holder carries more than they have proposed. In other words, they are in a net profit state. On the other hand, the indicator is below the threshold, indicating that the entire network is underwater.
The analytical company has used the MVRV ratio to define the pricing band corresponding to the average investor’s profitability (i.e. the average value of the MVRV ratio). These bands help point out periods when investors have unusually high profits/losses.
Below is a chart shared by the Glass Festival in the report showing the trends in the pricing bands of these bitcoins over the past few years.
As shown in the figure, Bitcoin prices have been trading on the average of the model for some time. Recently, the assets also damaged the +0.5 standard deviation (SD) line.
This line corresponds to the price where the MVRV ratio reaches a standard deviation of 0.5 over the historical average. Currently, the level is about $100,200.
The level BTC hasn’t yet exceeded in the latest rally is +1 SD One, at $119,400. From the chart, the breakdown of cryptocurrencies on this line usually results in their highest price.
The explanation behind this model is that the larger investors’ profits grow, and the more holders occupy them. Under the extreme deviation of the MVRV ratio, the pressure to holders succumb to this temptation becomes great, so why should assets reach the highest level in the long run.
In the current cycle, Bitcoin violated the model’s +1 SD level twice, eventually forming at peaks in March 2024 and December 2024. Currently, the current gatherings are still below this level, but above +0.5 SD, which also corresponds to significant gains.
“This shows that the market is relatively heating, but it can be said that there is still room for further expansion before the unrealized profits held by investors reach the extreme level of +1σ,” the analysis firm explained.
BTC price
Bitcoin has seen some callbacks over the past day, with the price dropping to $105,900.
