The MVRV trend (3 years) of Bitcoin during the last year and a half looks very similar to the situation of 2017-2019.
The price of Bitcoin (BTC) has kept investors waiting for a significant move, but it is likely that a slow and steady price consolidation could continue to keep the market waiting.
Bitcoin price has been in a further downward trend for most of this year. As the price of BTC has been trading below the $20,000 mark for more than two weeks, market participants are watching for signs of a breakout.
With no major catalysts for a breakout in sight, many in the market ponder whether the $19,000 range is the bottom of the market.
Bitcoin (BTC) Price: Overview
Following the June 2022 crash that dropped the Bitcoin price by more than 35%, the BTC price has maintained range-bound momentum.
In mid-August, the price of Bitcoin reached a local high of around $25,000, but since the bulls were unable to sustain the price above that level, another retracement of roughly 25% ensued in the following weeks.
After nearly four months of stagnant price action, it makes sense to watch the long-term trend of BTC to better understand when Bitcoin price might bottom.
Santiment data showed that the Mean Dollar Invested Age (MDIA) indicator is at its highest point, which means that there is no distribution of coins for a long time. On the other hand, the MVRV trend (3 years) of the last year and a half looks very similar to the 2017-2019 situation.
It is worth noting that at the end of 2018, when MVRV had a similar pattern, the price bottomed out at the same level.
Additionally, stock volume has dropped significantly from the top of the market, and sentiment has had many more lows than highs simultaneously.
Usually, when sentiment is negative, price tends to go higher, doing the opposite of the pack.
Market Participants are Rekt
The loss of profits made on the Bitcoin network shows that in BTC, participants have experienced losses at the same level as in 2019. However, in USD terms, the losses are much higher, as the price of BTC has grown almost 10 times since then.
NPRL is a good indicator that indicates how interested the market participants are.
Additionally, data from Glassnode highlighted that Bitcoin price could be poised for a burst of volatility.
It is important to remember that the price of Bitcoin has been cyclically volatile, which can be demonstrated with a few examples: in early 2013, the value rose from $15 to a high of $266 before collapsing to around $50. In 2018, the price of this cryptocurrency surged to $20,000 and then dropped to $6,000.
Some factors that cause volatility are the following: rumors spread across social networks, the strength or weakness of fiat currencies, the presence of forks, moves made by the whales, the ability of an asset to be converted into another currency or cash (liquidity), and the size of the market, among others.
Interestingly, futures open interest has reached all-time highs, despite liquidations being at all-time lows.
Therefore, looking at the current long-term data situation may give Bitcoin Hodlers some hope. However, history does not always repeat itself. In the event of a bearish outcome, the price of BTC could return to $16,000 and subsequently to the $14,000 price level.
By Audy Castaneda
