- Despite having a positive performance Year-to-Date (YTD), Bitcoin is seen as a significant asset with long-term growth potential.
- Crazzyblockk noted that market sentiment is low enough to change, and short-term holders are at a “significant disadvantage.”
- For the medium term, the analyst pointed out that there is hope for relief. Additionally, he added that Bitcoin’s potential to rise above $30,000 depends on the cost range of $27,500 to $29,000.
Bitcoin’s long-term potential is too important to ignore, but remaining below this price level in the medium term may make things difficult.
Bitcoin’s MVRV Ratio and Long-Term Potential
Despite its YTD positive performance, Bitcoin is considered a significant asset with long-term growth potential. This view was expressed by on-chain analyst Crazzyblockk.
Crazzyblockk, who regularly shares articles about market sentiment on CryptoQuant, pointed to the Market Value to Realized Value (MVRV) ratio as the reason for this view. The MVRV ratio calculates an asset’s market value relative to its realized value.
By comparing these two metrics, you can understand when the price is above or below the “fair value” and assess market profitability.
As shown in the above chart, and as confirmed by Crazzyblockk, the MVRV ratio was above 1. The analyst explained how the metric relates to price and market value, stating:
“We are still above the 1st level in MVRV Ratio, and we are moving based on Realized Emission Value < Market Value according to Cost Base of Holders.”
However, the analyst noted that the bullish trend does not apply to short-term holders. When addressing this aspect, Crazzyblockk mentioned that market sentiment is low enough to change, and short-term holders are at a “significant disadvantage.”
Pay Attention to the $27,500 Level
For the medium term, the analyst expressed hope for a relief rally. Additionally, he added that Bitcoin’s potential to rise above $30,000 depends on the cost range of $27,500 to $29,000.
To arrive at this conclusion, Crazzyblockk analyzed Bitcoin’s realized price. Realized price provides an average cost base for all Bitcoins based on their last transaction prices. It is calculated by considering all Bitcoins and dividing them by the number of Bitcoins in circulation, based on their last on-chain transactions. Therefore, the analyst wrote:
“If we look at the average Realized Price or the money they put per Bitcoin, the price levels of $27,500-$29,000 are the balance area for these holders.”
Meanwhile, Crazzyblockk issued a strong warning. According to him, Bitcoin remaining below the aforementioned realized prices poses a significant risk in the medium term. The longer Bitcoin stays below $27,500, the longer the recovery may take. The analyst also stated:
“Furthermore, the longer the time spent below these price levels, the more incentive there is to remove liquidity from the market, and Bitcoin’s turning back to an uptrend depends on the price breaking above the short-term realized prices.”
