Bitcoin 30-Day MVRV Ratio Shows Weakness As It Drops To New Lows, Ongoing Correction To Extend?

Bitcoin enjoyed a brief period of upward movement, pushing its price slightly above the $86,000 mark. Presently, the flagship asset appears to be losing its bullish momentum as it revisits levels below $84,000. The BTC’s pullback has been accomplished with negative performances of several key metrics.

A Sign Of Market Weakness For Bitcoin

Despite the sudden pullback, BTC’s price has found strong support at the $83,000 level. However, Bitcoin’s short-term profitability outlook is facing renewed pressure as the 30-day Market Value to Realized Value (MVRV) ratio experiences a sharp decline to new lows.

In a recent quick-take post on the CryptoQuant platform, Gaah, an on-chain and market expert, reported that BTC’s MVRV in the 30-day time frame has fallen to its lowest level in 6 months. This notable drop in the key metric, which measures the average profit or loss of recent BTC holders, signals that many short-term investors are struggling. 

The development is likely to spark a major shift in Bitcoin’s market dynamics, especially if the flagship asset fails to hold key resistance levels. It also points to potential consolidation or capitulation and suggests waning market sentiment, with the decline coinciding with persistent price fluctuations.

Data shows that the indicator has moved back into the bottom part of the neutrality band, indicating that there is a strong sense of acute anxiety in the market. Specifically, the lower region of the neutrality range is found between the 1.8 and 2.1 levels. Areas marked by the expert as rectangles on the chart represent periods in the past when BTC’s price responded positively after the metric reached this lower zone.

These zones have functioned as technical and psychological support in the past, marking points of correction or resumption of the trend. Interestingly, this pattern was already seen during the recent decline to the $50,000 range, where the MVRV indicator also hit similar levels before commencing a fresh upswing.

In the meantime, the current chart shows that investors, particularly short-term players, are operating at a loss or extremely close to break-even points, which is often a sign that selling pressure is diminishing. Thus, the current cyclical behavior of the MVRV hints at a potential rebound opportunity in Bitcoin’s price even as market sentiment is rooted in fear.

BTC Short-Term Holder MVRV Still Positive

Recent reports from market expert Darkfost revealed that the BTC Short-term Holder MVRV Ratio continues to trend around 0.9. This means that the short-term investors are currently sitting on an average unrealized loss of about 10%. According to the expert, the realized price for these holders is hovering around $92,800, a crucial level that must be reclaimed to confirm the continuation of the upward trend. 

It is worth noting that the STH MVRV has not witnessed a breach since it reached the +1 deviation in April 2021, a level that has marked the last 4 cycle tops. Given that the current MVRV of 1.32 is equivalent to the +1 standard deviation barrier, short-term holders would have an average unrealized profit of 32% at the time.