On-chain data indicates that the Bitcoin Market Value to Realized Value (MVRV) Ratio for short-term holders is currently undergoing a critical retest, which could have significant implications for BTC’s price. According to on-chain analyst Checkmate, the short-term holder MVRV Ratio breaking above its 155-day moving average (MA) could potentially trigger bullish behavior for Bitcoin.
The MVRV Ratio is a widely-used metric that compares the market value held by BTC investors (market cap) against the initial value they invested (realized cap). A value greater than 1 suggests that the average address on the network is currently in profit, while a value below 1 indicates that losses dominate the market.
For this analysis, the focus is on the MVRV Ratio of short-term holders (STHs), who are investors that have acquired their coins within the last 155 days. This specific MVRV Ratio reflects the profit and loss status of buyers from the past five months.
Recent data shows that the Bitcoin STH MVRV Ratio has been on the rise, correlating with the latest recovery rally in the cryptocurrency’s price. The indicator has surpassed the 1 mark, indicating a return to profitability for this group. More crucially, it is now attempting to break above its 155-day MA. Historical trends, as highlighted by Checkmate, suggest that BTC usually experiences bullish momentum when the STH MVRV Ratio crosses above this line.
The last significant crossover of this nature occurred in the first quarter of this year, preceding a rally that pushed Bitcoin to a new all-time high (ATH). If history repeats itself, BTC might see another bullish wave if the STH MVRV Ratio successfully breaks past its 155-day MA. Checkmate notes, “If the bulls get their way, and we set a weekly higher high around $65,300, I’d reasonably expect an attempt to the ATH.”
However, the analyst also cautions that profit-taking by these short-term holders could be a risk once Bitcoin’s price reaches the $66,100 to $70,800 range, as these investors might prefer to secure their gains.
In related developments, Bitcoin has jumped about 8% in the past week, pushing its price to approximately $63,700. This surge is reflected in the latest price charts, where BTC shows a definitive upward trend.
