This Bitcoin Indicator Has Hit Levels That Often Lead To Corrections

This Bitcoin metric has reached levels that have historically signaled corrections in the price of the cryptocurrency, according to on-chain data. The metric in question is the “Market Value to Realized Value (MVRV) ratio,” which measures the ratio between Bitcoin’s market cap and realized cap. The realized cap is based on the assumption that the real value of a coin in circulation is not equal to the current spot price, but rather the price at which it was last transacted on the blockchain. The MVRV ratio can indicate the amount of profits or losses held by investors. Currently, the MVRV ratio for short-term holders (investors who bought within the past 155 days) is 40% above their average cost basis. In the past, this level has often led to corrections in the asset’s price. However, it is important to note that this does not guarantee a correction will occur, but there is a chance based on historical patterns. The volatility of Bitcoin’s price in recent days adds to the uncertainty surrounding its future movements.