Data shows that Bitcoin is currently approaching two notable on-chain price levels. Here’s what happened the last time BTC broke above them.
Bitcoin is approaching protected price and MVRV +1SD currently
In a new publish on X, Glassnode’s lead on-chain analyst Checkmate points out that BTC has been close to two price levels on the network recently. The first of these levels is “MVRV +1SD”.
O Relationship between market value and realized value (MVRV) is a famous indicator for Bitcoin. In short, it compares the value that BTC holders currently carry (i.e., the market value) with the value they place in the cryptocurrency (the realized value).
This metric is generally used to determine the range of profit or loss that the market as a whole is taking at this time. Based on this, the fairness of the coin price can be assessed.
In the context of the current discussion, the +1 standard deviation (SD) of the MVRV index relative to its mean is relevant. More specifically, the price level at which the market would satisfy this MVRV ratio condition is the focus.
The other level of interest in the network here is the “Vaulted Price”. This indicator is a product of “Cointime Economy”Framework that Checkmate created together with David Puell from Ark Invest. In reference to this metric, the article says:
The Vault Realized Price can be considered a price level that reflects the “potential energy” stored in the system. Somewhat counterintuitively, the more long-term coin accumulation occurs, the greater the uncertainty becomes between the proportion of truly lost supply and the HODLed supply. The realized vault price will trade lower in this case as more currency accumulation occurs and uncertainty regarding future distributive pressure increases (and vice versa).
Now, here is a chart showing the trend of these two indicators, as well as some other “original” network levels, over the past few years:
Looks like the asset has been near these two levels in recent weeks | Source: @_Checkmatey_ on X
As shown in the chart above, Bitcoin’s spot price previously broke out of the domed price and went to MVRV +1SD (note that the labeling was reversed on the chart by mistake, as Checkmate noted in response to the post).
Since then, the price has dropped a bit and is trading at both levels. However, it is currently quite close to them and well above other price levels on the network, such as realized price.
As the chart highlights, the last time the cryptocurrency was in this situation was in December 2020. Obviously, what followed was the 2021 bull run.
It remains to be seen what Bitcoin’s interactions with these levels will be like this time around and whether a similar euphoric run will occur with a possible breakout above them.
BTC Price
Bitcoin had soared above the $72,000 mark previously, but has since fallen again and is now floating around $69,000.
The price of the asset appears to have plunged over the past day | Source: BTCUSD on TradingView
Featured image by Yiğit Ali Atasoy on Unsplash.com, checkonchain.com, chart by TradingView.com
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