Bitcoin (BTC) Price Prediction: MVRV Ratio Tests Support as Long-Term Holders Near Crucial Threshold

Recently, Bitcoin [BTC] experienced a significant dip, reaching a level that nearly positioned long-time holders at the brink of non-profitability. This situation highlights the importance of the current Bitcoin's Market Value to Realized Value (MVRV) ratio, which is a critical support line for Bitcoin's price. If this support line is breached, the market could react in several ways.

Bitcoin (BTC) recently experienced a significant dip, reaching a level that could put long-term holders on the edge of unprofitability.

This situation makes the current Bitcoin Market Value to Realized Value (MVRV) ratio a critical support line for Bitcoin’s price, as it could determine the market's response to this price point.

Bitcoin ratio tests support

A recent post by Santiment unveiled insights into the current state of the Bitcoin ratio. The post highlighted the MVRV ratio, specifically focusing on the 30-day and 365-day metrics.

This analysis is crucial in gauging the immediate and longer-term financial standing of Bitcoin holders.

The 30-day MVRV ratio, which gauges the profit or loss status of those who bought BTC in the last month, recently dipped below zero.

This decline began around June 11th, and the ratio has worsened to about -6.8% as of the last report on July 8th. This indicates that, on average, these holders are experiencing a loss of over 6%.

Moreover, on a broader scale, the 365-day MVRV ratio, which reflects the market behavior of long-term holders, showed these investors were nearing a critical threshold.

Over the course of this metric, it has remained above zero, suggesting that long-term holders have maintained a profitable position.

However, recent data revealed a concerning trend: just a few days ago, the ratio dropped to about 1.25%, marking its lowest point in months, and as of the last report on July 8th, it was hovering around 2.8%.

This proximity of the long-term MVRV ratio to the breakeven point is significant because it acts as a support level.

If this Bitcoin ratio were to drop below zero, it could signal a shift in sentiment among long-term holders. It could increase selling pressure as these investors look to cut losses or capitalize on remaining gains.

In turn, this could amplify the downward pressure on BTC’s price. On the other hand, if the support holds, it could instill confidence among investors. It could stabilize the price or even drive recovery.

The market’s response to this pivotal point will be essential in determining BTC’s short to medium-term price trajectory.

Bitcoin’s current trend

An analysis of Bitcoin on a daily time frame chart provides a closer look at its recent market movements. BTC initially experienced a notable decline in the previous trading session, hitting a low of about $54,278.

This downturn briefly heightened concerns regarding the potential for breaking key support levels within the Bitcoin MVRV ratio—a metric closely watched for signs of market stability or stress.

However, the daily relative strength index (RSI) was at 43.46, indicating that the coin might still have some room to fall before encountering significant buying pressure.

Afterward, the session closed with a gain of over 1%. As of this writing, it was trading at over $57,000, up about 0.6%.

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