Recently, a key indicator on-chain has sent a 'bearish signal' ⚠️, which you may not have noticed—Bitcoin's MVRV ratio has dropped below its 200-day moving average, simply put, it might be time to be cautious!

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🔍 What is the MVRV ratio?

Don't be afraid if you don't understand, let me explain simply 👇
MVRV = Market cap ÷ Realized market cap

  • Market cap is "the total Bitcoin in circulation multiplied by the current price," you know what I mean.

  • How to calculate market cap? It’s to count all circulating BTC based on the price at their last move—that is, the “cost price” when everyone bought in.

➡️ So this ratio is actually used to determine:
“Are people making money or losing money now?”

📉 Current situation?

According to on-chain analyst @ali_charts, the MVRV ratio has recently fallen below the 200-day moving average...

The last time this 'death cross' occurred was in February this year, and as you can see, BTC subsequently went through an adjustment.

What about this time? Although the ratio is still greater than 0, meaning everyone is 'overall still profitable' 💰, the trend is deteriorating, and risks are quietly approaching 👀.

🧠 How to interpret this signal?

You can understand it this way:

  • If MVRV is high, it means everyone is making money on paper, and market sentiment is often overly optimistic (even overheated) 🔥

  • If MVRV falls below long-term moving averages (like the 200-day SMA), it indicates that most people might not be making as much money anymore, and some may even be losing...📉

And this change in mentality often leads the market to weaken further.

🤔 So what should we do now?

We can't say for sure that there will be a crash! But this signal does remind us:

📌 There may be increased volatility in the short term, be sure to manage your risks!

📌 If you are a long-term holder, don’t panic, manage your positions well;
📌 Short-term traders? Then keep a close eye on the market, don’t chase the highs!

To summarize:

🧭 MVRV ratio = thermometer for investors' profit status
📉 Falling below the 200-day moving average = the market may start to 'catch a cold'
👀 Be especially careful of market reversals or false breakouts!

📌 Reminder: The above is a sharing of viewpoints and does not constitute investment advice, DYOR (do your own research)!

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