Although Bitcoin may further pull back, there are signs that its good MVRV score and strong fundamentals will help drive it higher in the long term. According to CoinGlass data, the Market Value to Realized Value (MVRV) indicator shows that even though BTC hit a historic high last week, its price is still undervalued. Its MVRV-Z score has dropped from last week's high of 3.3 to 2.84. Historically, an MVRV-Z score below 3.7 indicates that the asset is undervalued. The MVRV-Z score is an important metric for measuring the market value and relative value of tokens, calculated by subtracting the realized market value from the circulating market cap and then dividing that number by the standard deviation. Bitcoin's MVRV score during its last major adjustment in March of this year was 3.03, and during the last major adjustment in January 2021, it was 7. This suggests that the score indicates BTC may experience a strong recovery in the coming weeks. Additionally, BTC has some strong fundamentals, including the circulating supply of BTC has dropped to a multi-year low of 2.24 million coins. In September of this year, there were over 2.72 million BTC in exchanges. This indicates that more and more investors are buying BTC and storing it in self-custody wallets, with some investors accumulating ETF shares. Another potential catalyst for Bitcoin is that the market value of stablecoins has surged from $122 billion a year ago to nearly $210 billion. Meanwhile, Bitcoin's annual inflation rate continues to decline from nearly 12% in 2015 to 1.12%. The decline in the inflation rate is due to the halving events and an increase in mining difficulty. (crypto.news)

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