Since the United States announced its latest interest rate adjustment, Bitcoin [BTC] has seen a gradual price recovery.

On September 23, the cryptocurrency peaked above $64,000, gaining 8.5% in value over the past week.

However, Bitcoin has since corrected slightly, to $63,786 at press time – still up 0.2% over the past 24 hours.

The asset's recent performance has caught the attention of analysts, especially with its resistance and support levels suggesting a potential shift in momentum.

One of the analysts, using the nickname CoinLupin on the CryptoQuant platform, pointed to Bitcoin's Market Value to Realized Value (MVRV) ratio as a key indicator of the potential direction of the market.

The MVRV ratio compares Bitcoin's market value to its intrinsic value, giving traders a clear understanding of whether the asset is overvalued or undervalued at a given point in time.

Important Indicators for Bitcoin Trend

In a recent analysis, CoinLupin explained that Bitcoin’s 1-year and 4-year MVRV ratio has acted as important resistance or support levels during various market trends.

According to the analyst,

“The overall market flow tends to follow a similar pattern.”

CoinLupin emphasizes that the MVRV ratio, especially during the recovery phases in 2023, provides valuable insight into Bitcoin's price movements.

The current market scenario shows a difference from previous trends.

After a brief “overheating” phase during the recent recovery, Bitcoin’s price correction was milder than expected, and the accumulation phase has lasted longer than expected.

This prolonged accumulation phase has caused Bitcoin's MVRV ratio to fall below both its 1-year and 4-year averages.

While this could be a signal that the market is undervalued, the analyst suggested that for Bitcoin to regain strong bullish momentum, the MVRV ratio must surpass its 1-year average.

This could trigger a new bullish phase, leading to potential gains in the coming weeks.

Open Contracts and Active Address

Not just the MVRV ratio, other important indicators also need to be considered to determine Bitcoin's upcoming price action.

According to data from Coinglass, Bitcoin Open Interest – an indicator of the number of open Futures contracts on the asset – has dropped 0.85% to a current value of $34.78 billion.

This decrease in Open Interest suggests that traders may be closing their positions, which could be a signal of caution or uncertainty in the market.

Furthermore, Bitcoin Open Interest volume, which tracks the total value of active contracts, fell 20.86% to $45.77 billion.

A sharp drop in Open Interest usually indicates reduced participation in the market, which can weaken price movement.

On the other hand, data from Glassnode shows a positive development in Bitcoin's active addresses, with a significant recovery after a sharp drop earlier this month.

The number of active addresses—an indicator of network activity—has increased from 600,000 to 797,000 as of today.

This increase in active addresses could be a signal of renewed interest in Bitcoin and could lead to stronger price movements, especially as more people join the network.