$BTC
From the trend point of view, let’s pay attention to the ratio of MVRV. Let’s briefly talk about it below.
When the MVRV ratio is greater than 1, it means that the current market capitalization is higher than the realized market capitalization. Such a trend suggests that investors overall are in a net profit position.
On the other hand, a metric below that mark means that regular holders are currently in the red as the value of their holdings is less than the purchase price.
When BTC surpassed the November 2021 all-time high (ATH) in the first quarter of this year, the Bitcoin MVRV ratio has surged to significant levels. The indicator also increased following a new ATH breakout, but the indicator is clearly not yet close to the highs seen earlier this year.
Historically, whenever this indicator reaches highs, the cryptocurrency has hit new highs. As marked on the chart below, MVRV levels have been declining over the past few cycles.
Once the trend line on the chart holds, then the current cycle should peak when the MVRV ratio reaches around 3. Currently, the indicator is at 2, so it may be a while before Bitcoin overheats.
