- An analyst who writes about Bitcoin’s market sensitivity and its impact on holders at CryptoQuant stated that the recent drop has left UTXOs in a positive position for 1-3 months.
- According to Onchained, Bitcoin’s MVRV was above 1 at the time of the analysis, indicating a higher likelihood of BTC being in an upward trend than a downward one.
- According to Adler, there has been an increase in long positions in Bitcoin. In his post, Adler also evaluated the situation of Taker Orders.
The recent pullback in Bitcoin price may not be a bad sign; According to the on-chain analyst, current data strengthens the possibility of an increase for Bitcoin.
What Does the MVRV Ratio in Bitcoin Indicate?
The recent pullback in Bitcoin is not seen as a bad sign by the on-chain analyst. An analyst at CryptoQuant, who writes about Bitcoin’s market sensitivity and its impact on holders, noted that the drop has left UTXOs in a positive position for 1-3 months.
Onchained showed that the reason for reaching this conclusion is that 1-3 month UTXO holders are just slightly below the average acquisition price. Typically, this is considered a sign of minimal unrealized losses. Therefore, a potential move towards breakeven levels can build more confidence in the market.
To arrive at this conclusion, the analyst used Market Value to Realized Value (MVRV). This is done by dividing the supply held by UTXOs in the 1-3 month timeframe by MVRV. MVRV is the result of the division between the total market value and the realized market value. The result of this measurement gives an idea of whether Bitcoin is at a fair value, undervalued, or overvalued.
According to Onchained, Bitcoin’s MVRV was above 1 at the time of the analysis, indicating a higher likelihood of BTC being in an upward trend than a downward one. The analyst also added:
“In our current scenario, the swing trader cohort’s MVRV has recently crossed above the 1 level, which can be interpreted as a positive sign and may indicate an opportunity to slowly take a long position or strengthen an existing one.”
If BTC goes to $32,000, who would oppose it?
At the same time as Onchained published its analysis, research analyst Alex Adler Jr. shared a post on X (formerly Twitter). According to Adler, there has been an increase in long positions in Bitcoin. Adler also assessed the situation of Taker Orders in his post. Taker Orders measure the bid and demand positions taken by traders in the derivatives market.
According to the analyst, the cumulative 8-hour delta value of Taker Orders was positive. This data reinforced the notion that market sentiment is bullish. Additionally, Coinglass showed an increase in open positions in BTC Futures in the last 24 hours. Open Positions are used as an indicator to determine the strength of the price and represent the total number of contracts held by market participants.
An increase in Open Positions indicates an increase in liquidity. A decrease indicates an increase in the closing of initially held contracts. In a scenario where the first case is valid, an interesting observation was made that traders are targeting $32,000.
