The 4-year or 1-year average of MVRV has often served as significant resistance or support in Bitcoin's market trends. (The overall market flow tends to follow a similar pattern.)

In March, based on on-chain data analysis, we conducted an evaluation of potential short-term tops and the need for risk management.

Since then, during the months of July, August, and September, we have continued our analysis, keeping in mind the potential for a short-term correction to conclude and the possibility of a trend reversal.

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Currently, the MVRV trend is showing a slight deviation from past patterns. After a brief period of overheating during the recovery phase, the price correction was milder than expected, and the consolidation period has been prolonged, resulting in MVRV dipping below both the 1-year and 4-year averages.

While the recent market recovery is promising, MVRV remains below the 1-year average, indicating that the market is still undervalued relative to the past year.

For the market to regain its bullish momentum, MVRV needs to rise above the 1-year average. This could serve as a trigger for a new bullish phase.

Written by CoinLupin