The MVRV Z-Score indicates that Bitcoin is in a growth phase with room for further appreciation.
Bitcoin's price volatility is increasing, with a decline in price but a surge in trading activity.
Technical indicators suggest Bitcoin’s bullish momentum is cooling, pointing to a period of consolidation.
Ali Charts, a crypto analyst, has emphasized that Bitcoin price remains far from a market top, pointing to the MVRV Z-Score as a critical indicator of the cryptocurrency’s growth potential.
https://twitter.com/ali_charts/status/1861497441809219702
In a recent analysis shared on his X account, Ali Charts highlighted the metric’s ability to identify market tops and bottoms by comparing Bitcoin’s market capitalization to its realized value.
Historically, periods when the MVRV Z-Score enters the red zone have signaled market peaks, as observed during Bitcoin’s notable bull runs in 2011, 2013, 2017, and 2021.
Source: Ali Charts
Conversely, market bottoms, such as those during the bear phases of 2015, 2018, and 2020, align with the metric entering the green zone. As of 2024, the MVRV Z-Score is rising but remains below the overvaluation threshold, indicating Bitcoin’s current growth phase may still have room to continue.
Market Activity Shows Heightened Volatility
Bitcoin’s recent trading data further supports the notion of ongoing market activity and volatility. As of press time, the crypto asset was priced at $91,093.45, reflecting a 4.03% daily decline. Bitcoin’s market capitalization has dipped by 4.05%, now at $1.80 trillion.
However, its 24-hour trading volume surged by 32.20% to $97.21 billion, signaling increased trading interest despite the price pullback.
Source: CoinMarketCap
The intraday chart shows Bitcoin opened the day near $94,900 before experiencing significant sell-offs, driving its price below $91,100. This volatility could be attributed to profit-taking, macroeconomic developments, regulatory updates, or shifting investor sentiment.
With a circulating supply of 19.79 million BTC out of the maximum of 21 million, Bitcoin’s inherent scarcity continues to underpin its value.
Technical Analysis Reflects Cooling Momentum
Bitcoin’s technical indicators signal a cooling of bullish momentum following a robust rally in recent weeks that saw the cryptocurrency surpass $100,000. The MACD indicator shows a potential bearish crossover, with the MACD line (blue) dipping below the signal line (orange) and the histogram bars shrinking, indicating diminishing upward pressure.
Source: TradingView
The RSI has also fallen to 59.76 after briefly entering overbought territory above 70. This decline suggests Bitcoin is transitioning into a neutral zone, signaling a period of price stabilization or consolidation.
