An analyst explained that the next target for Bitcoin could be $78,700 if BTC manages to cross this resistance level of an on-chain pricing model.
Bitcoin MVRV Extreme Deviation Price Ranges Place Resistance at $65,800
In a new publish On X, analyst Ali discussed some Bitcoin price levels that could be important based on an on-chain pricing model. The model is based on the Market Value to Realized Value Ratio (MVRV).
The MVRV ratio is a popular indicator that, in short, tracks the relationship between the amount of Bitcoin investors currently hold (the market value) and the amount they initially used to purchase their coins (the limit realized). This metric tells us about the profit/loss situation of the market as a whole.
Now, a pricing model called MVRV Extreme Deviation Pricing Bands uses standard deviations from the historical mean of the MVRV ratio to determine significant price levels for the cryptocurrency.
Below is the chart shared by the analyst that shows what the relevant levels for this model have looked like recently.
The yellow line in the middle of the chart represents the price level at which the MVRV ratio would become equal to its historical average. Currently, this level is equal to about $52,900.
The level above this line, colored in orange, corresponds to +0.5 standard deviation (SD) above the indicator’s mean. Currently, the spot price of the cryptocurrency is below this mark, which implies that the deviation of the MVRV index is less than +0.5 SD.
Ali notes that this level, corresponding to +0.5 SD, at around $65,800, is “one of the most crucial resistance areas” for Bitcoin. The chart shows that Bitcoin struggled to break above this level during retests in December 2023 and January 2024.
The analyst says that if BTC manages to overcome this resistance, the $78,700 mark, corresponding to +1 SD of the MVRV index mean, could be the next significant target.
Historically, top formation in the asset became more likely when the MVRV index deviated above this line. The All-Time High Price (ATH) Earlier in the year, which remains the peak of the recovery, also occurred shortly after the asset had risen above this level.
At Bitcoin’s current spot price, a rise towards this potential target of $78,700 would suggest a rise of over 27% for the cryptocurrency. Before the asset could even dream of retesting this level, it would need to break above the $65,800 resistance.
BTC Price
Bitcoin broke above the $63,800 level yesterday but suffered a setback in the last 24 hours as its price dropped to $61,800.