In particular, the 30-day average returns of Bitcoin's MVRV (Market Value to Realized Value) ratio have dropped to a more wholesome +4/2%. This metric has historically been a crucial indicator of market movements. An overbought market and a possible correction are frequently indicated when the ratio rises above +5%.
A decline below -5%, on the other hand, is a clear indication of undervaluation and frequently results in a bounce. At this moment, Bitcoin is just above the correction territory threshold indicating caution. Small losses have been incurred by retail traders who entered the market at the late-November highs which may help to stabilize the market cap.
BTC/USDT Chart by TradingView
This cooling-off period might reduce the fervor of speculation and enable Bitcoin to trade in a range that is more sustainable. Bitcoin's price chart shows some resilience, but it also suggests that it may consolidate in the foreseeable future. The $98,000 and $100,000 key resistance levels are where previous upward momentum encountered hesitancy.
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$91,000 shows up as a critical zone on the support side supported by prior accumulation and robust volume profiles. Below this, the 50-day moving average, or $81,500, serves as a safety net. The market's next move depends on whether Bitcoin can overcome the resistance level of $98,000 or drop below $91,000.
Before any notable upward surge, the MVRV ratio and these technical levels point to a period of sideways movement or slight pullbacks. A deeper correction could ensue in the absence of strong buying support but a breach of $100,000 would likely spark fresh bullish momentum.
A cooling-off phase is indicated by Bitcoin's MVRV ratio which gives the market a chance to adjust. To predict the next trend, traders should keep a close eye out for movements around $91,000 and $98,000. As the market processes recent gains, short-term caution is necessary even though the long-term outlook is still positive.
