• Bitcoin’s January price rally has put much of the market back into profitability for the first time in months.
• Analysts at Glassnode present a number of more advanced models that look at the differential between the Bitcoin price and Realized price to determine whether the market is reaching a top or bottom.
• The Market Value Realized Value (MVRV) Ratio recently recovered back above 1.0 after falling below 0.8, suggesting that the medium-long term outlook for the Bitcoin market is looking good.
Bitcoin Returns to Profitability
The Bitcoin market’s return to profitability is seen in its resurgence in price, last around $23,500 – well above its so-called „Realized Price“ which is currently around $19,850 according to data from crypto analytics firm Glassnode. Technicians view a break above this level as a signal of a meaningful shift in the market’s medium-term momentum.
Advanced Models Suggest Bullish Outlook
Analysts at Glassnode present a number of more advanced models that look at the differential between Bitcoin’s spot and realized prices in order to determine whether it’s reaching a top or bottom, or about to embark on a prolonged bull or bear run. These metrics are sending out an unified signal – that the medium-long term outlook for Bitcoin looks good if history is anything to go by.
MVRV Ratio Recovers From Historical Lows
Glassnode presents a metric called the Market Value Realized Value (MVRV) Ratio – A ratio between current spot price and realized price with ratio levels of 0.8 and 1.0 being viewed as extremely weak and 2.4 and 3/2 being viewed as extremely strong. This ratio recently recovered back above 1 after falling below 0/8 during last year’s FTX collapse, signaling extreme weakness at that time but now suggesting an improved outlook for Bitcoin’s future prospects .
Price Bands Show Bullish Signals
Another way to visualize this MVRV Ratio is via plotting blue lines on chart alongside spot & realized prices showing levels that are 0/8 below & 2/4 & 3’s times above realized prices – when BTC falls back to these blue lines it has historically been an excellent long term opportunity for investors looking capitalize on future appreciation potential whilst minimizing risk exposure .
Conclusion: BTC Bulls Are Energized
The return of many markets across cryptocurrency space into profitability thanks to January’s electric BTC rally signals bullish sentiment from analysts & technicians alike who are confident about longer term prospects for BTC valuation growth . Longer term investors will be monitoring these metrics closely over coming weeks & months as they attempt make informed decisions about where best place their funds .