The MVRV ratio is an indicator that reflects whether the current price is overvalued or undervalued. Historically, values below 1 have often marked bottoms, while readings above 3.7 have signaled market tops.
The current MVRV stands at 2.2 and is converging toward its 365-day moving average. In the past, similar periods of convergence were often followed by price increases, with the MVRV ratio rising toward overvalued levels. This is similar to how a company’s stock price rarely lingers around its long-term moving average for long.
Conclusion:
Bitcoin appears to be in an energy-consolidation phase ahead of its next upward move, and the MVRV ratio is likely to rise toward the overvaluation zone soon.
Written by CoinCare
