On-chain data shows that Bitcoin’s market value to realized value (MVRV) ratio of short-term holders is currently undergoing a retest that could be significant for BTC’s price.
Bitcoin STH MVRV Ratio Is Retesting Its 155-Day MA Right Now
As explained by network analyst Checkmate in a new publish at X, the short-term holder’s MVRV ratio breaking above its 155-day moving average (MA) could lead to bullish action for Bitcoin.
THE MVRV Ratio is a popular indicator that, in short, tracks how the value held by BTC investors as a whole (i.e. the market value) compares to the value they initially put in (the realized value). When the value of this metric is greater than 1, it means that it can be assumed that the average address on the network is holding a net profit at this point. On the other hand, being below the threshold suggests loss dominance in the market.
In the context of the current topic, the MVRV Index of only one specific segment of the sector is of interest: the short-term holders (STHs). STHs include investors who have purchased their coins in the last 155 days. Thus, the MVRV Ratio for this cohort tells us about the profit/loss situation of buyers over the last five months.
Now, here is a chart showing the trend of the Bitcoin STH MVRV index over the past few years:
As displayed in the chart above, the Bitcoin STH MVRV ratio has been rising recently as the cryptocurrency’s latest price rally has taken place. With this increase, the indicator has slightly crossed the 1 mark, implying that profitability has returned to the group. More importantly, however, the metric is now attempting to find a break above its 155-day MA. As Checkmate highlighted in the chart, BTC usually tends to enjoy some bullish momentum whenever the STH MVRV ratio crosses above this line.
The last time this type of crossover occurred on the indicator was in the first quarter of this year and what followed was the recovery of the currency to a new All-Time High (ATH).
Given the precedence, it is possible that BTC could once again see a bullish wave if the STH MVRV index manages to break above its 155-day MA. “If the bulls get their way and we establish a higher weekly high of ~$65.3K, I would reasonably expect an attempt to reach the ATH,” the analyst notes.
Checkmate also warns, however, that profit-taking by these investors could be something to watch out for when the price hits the $66,100 to $70,800 range. This is because these investors, who do not tend to have strong determination, would make notable profits at these levels.
BTC Price
Bitcoin has seen a jump of around 8% in the past week, which has taken its price to the $63,700 level.